Are the banks past the worst?

With Goldman Sachs reporting a 20% jump in income, it may be tempting to think that banks are now out of the woods. But the sector is still in a critical condition.

"For a moment, it looked just like the good old days," said David Wighton in The Times. Goldman Sachs has reported a 20% year-on-year jump in net income to $1.8bn in the first quarter, a far better performance than expected and in line with results last seen in 2005/2006. And, "signalling a return to normality", as Economist.com put it, the bank also set aside almost $5bn in salaries and bonuses for staff, increasing the size of the compensation pool by 18%. It has also raised $5bn in new equity to help it pay back the $10bn or so in capital that it took from the government, something it hopes to do pending official approval.

Banking sector: behind the numbers

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