Bleak outlook to hit payouts at US banks

Cash and stock compensations for bond traders and senior management at banks in the US could be cut roughly by a third with Wall Street posting its worst year for such payouts after the 2008 financial crisis.

Wall Street compensations, which surged in 2006 and 2007, has been a hot-topic since the financial crisis as many believe banks prematurely rewarded employees for making risky bets. However, the compensation pressure is now high with banks posting lower trading revenue.

Meanwhile, August and September's roller coaster markets that spooked some investors, have also taken a huge toll on profits at Wall Street's major investment banks.

As banks' third quarter earnings season begins today investors are bracing to see what kind of losses have been visited by the expected steep drop in investment banking and trading revenue.

Businesses have seen a sharp slowdown with market volatility hitting merger and acquisition activity, initial public offerings and corporate debt deals that have ground to a near standstill.

Further, analysts project more layoffs at JPMorgan Chase, Morgan Stanley, Bank of America, Citigroup, Goldman Sachs, and Wells Fargo in addition to the thousands they had already disclosed.