Banks to pay windfall tax for keeping bonuses

City firms would rather absorb the cost of Alistair Darling's 50% windfall tax than cut back on staff bonuses this year, according to recent reports.

Some estimates reckon that the world's biggest investment banks intend to pay out more than £40 billion in salaries and bonuses in the next two weeks as the major institutions begin to report results. Particular attention will be paid to the US banks, beginning with JP Morgan Chase which reports its numbers on Friday.

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