Morgan Stanley is setting aside a huge sum to pay out bonuses despite posting its third consecutive quarterly loss and admitting it is disappointed with key departments.

The US bank’s latest results show it is allocating $3.9bn (£2.36bn) for paying out to staff, 72% of its net revenues. That dwarfs the percentage of revenue set aside by arch rival Goldman Sachs, where workers are on track for large bonuses after record results last week.

Morgan Stanley extinguished the tentative flames of optimism among US banks today when it posted a loss of $159m for April to June and said it was not satisfied with its performance in fixed income trading and in asset management.

News of the bank’s loss unsettled traders on Wall Street, whose view of the banking sector’s prospects was brightened last week by Goldman’s surge in profits and further upbeat news from JP Morgan, Citigroup and Bank of America. Katie Allen, The Guardian.

What did we expect? If we don’t apply the stick then they’re going to continue to eat all the carrots – financial regulation now! Although the proverbial horses have bolted with taxpayer’s money – we’ve been had again – let’s not let it happen again.