Time for Credit Suisse to claw back some of those bonuses?

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Credit Suisse is suddenly $2.9bn worse off than it was this time last week. Should bonuses be recalculated according to the revised numbers?

If 2007 earnings do turn out to be impacted by the 'pricing error' made by the Swiss bank's traders, the hypothetical answer may well be yes.

According to Bloomberg, assessments are under way to establish whether 2007 earnings will be impacted by the mistakes, which are expected to reduce first-quarter profits at the bank by around $1bn.

Even if 2007 earnings are squeezed by the errors, the good news for anyone at Credit Suisse is that the chances of being made to cough up a portion of bonus look slim - such a move would be unprecedented and headhunters say the bank wasn't exactly generous to begin with.

"The bonus round was pretty bleak down there," says one. "It was down 50% in fixed income and there were a lot of zeros."

In the short term, the only staff who will be pummelled look set to be the traders responsible for the confusion, who have reportedly been suspended.

"It may well be that they have awarded bonuses to those traders based on erroneous numbers, so there may be a need to review them," says Simon Adamson, an analyst at CreditSights.

Headhunters say a vigorous cost cutting programme has already eliminated at least 100 bankers from the CS fixed income department, including 21 out of 24 members of the bank's securitization origination and structuring team in London, with further redundancies to come.

Are other banks set to reveal a similar deterioration in their figures? David Williams, head of banking research at Fox-Pitt, Kelton in London, says Credit Suisse looks like a special case, but the next few months won't be easy: "2008 will be a mirror of 2007, with the first half being difficult with further writedowns."

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