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Does Wall Street have some swagger back? Bankers still lucky enough to be employed at Goldman Sachs may fare well this year. Even though one in eight staff departed in the past 12 months, the bill for compensation and benefits in the first quarter was $5bn, 18 per cent higher than the year before. Swatting aside consensus expectations with figures released on Monday evening, Goldman then proceeded to raise $5bn by issuing new equity on Tuesday, aiming to repay the $10bn of government cash received in October as soon as possible.

Prising government fingers free will not be easy though. Some small banks have already started to repurchase preferred stock issued to the Treasury as part of the troubled asset relief programme, and the government expects $25bn to be repaid this year. However, for the large banks, any such move requires permission, which will not be granted at least until the stress tests designed to assess their capital needs are completed this month. Even then, allowing Goldman and others to repay funds risks stigmatising weak institutions leaning more heavily on the government, and restarting the whole question of survival should further financial aftershocks of the credit crisis be felt.

Meanwhile, Goldman’s numbers do not suggest pre-credit crunch returns are just round the corner. Aside from the benefit of moving to year-end reporting, which conveniently meant December’s $1.3bn pre-tax loss was not included in its first-quarter figures, the results were boosted by a stellar trading performance in fixed income, currency and commodities. Cheap government funding and a steep yield curve helped here, as did distracted rivals. None of these will last for ever. A turnround in the advisory, equities and asset management businesses is still distant. The future weight of banking regulation is uncertain. Investment banking is off its knees, but it does not yet have a spring in its step.

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