The reflation of the financial industry continues. Last week, Citigroup’s CEO Vikram Pandit got his salary restored from the recession-related, punitive $1 level. He is now earning $1.75M per year. Goldman Sachs has joined the reflation and then some. Goldman’s CEO Lloyd C. Blankfein got a 2011 pay package including a 233% pay raise to $2M. Other executives were also granted generous increases in their pay packages. For more details see “Goldman Sachs Gives Blankfein a Big Raise.”
While this revival of largess may never trickle down toward the masses of unemployed and underpaid, it is once again difficult to imagine that deflation is an imminent threat when bankers are being restored to previous glory!
As of May 10, China will increase the reserve ratio requirement for banks 50 basis points. Currently, the biggest banks must maintain a 16.5% reserve ratio while smaller banks must maintain 14.5%.
Bloomberg reports that this third increase for the year may still prove inadequate to tame China’s inflation threat. Chinese officials continue to reassure markets that monetary tightening targets rampant speculation in real estate and that policy remains accommodative for the rest of the economy.