Some of Wall Street's banks are fed up with TARP  The new tax , due to be announced on Thursday by the Obama administration, is designed to calm an angry American public and help fill the black-hole left by the US’s $700bn bail-out of the banking industry.  The heads of Goldman Sachs, JP Morgan Chase, Morgan Stanley and Bank of America on Wednesday faced detailed questioning before the Financial Crisis Inquiry Commission – the body set up by US Congress to establish the banks’ role in triggering the worst recession since the Great Depression.  John Mack, Morgan Stanley’s chairman, confessed the investment bank ate its “own cooking, and we choked on it,” while Jamie Dimon, his opposite number at JP Morgan Chase, admitted the bank did “make mistakes” – as the quartet gave a penitent performance, admitting several mistakes.  Phil Angelides, the Commission’s chairman, questioned Goldman chairman Lloyd Blankfein over the ethicacy of creating derivative instruments containing sub-prime mortgages for clients, while simultaneously profiting by betting against them.  “It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars,” Mr Angelides said. Mr Blankfein downplayed Goldman’s role, arguing such products remain popular today.  Exorbitant pay and bonuses also raised hackles, with Mr Angelides likening banker’s remuneration to playing at a black jack table thanks to the significant potential upside from putting little capital down.  Mr Dimon admitted that it “is a little one-sided that way” but argued that bankers pay could become more adjusted to risks. Mr Dimon noted that the more senior a banker becomes, the more shares he has in the company, meaning he would “pay the price” should it fail.  The comments from the quartet – the fourth being new Bank of America chief executive Brian Moynihan – come as President Barack Obama prepares to unveild his tax on profits.  Having chosen not to tax banker’s bonuses directly, the US President instead intends to levy a fee on profits. The tax aims to recoup the expected $120bn deficit arising from the $700bn Troubled Asset Relief Programme (TARP) – the money that may never be fully repaid from loans made to smaller banks, the motor industry and insurer American International Group.  The tax, which will begin next year and last for ten years, is expected to be aimed at the US’s 20 largest banks. It is likely to be targeted at bank’s riskier investment activities, while ring-fencing consumer banking divisions, so that consumers don’t end up paying for it.  The tax is unlikely to be popular with Wall Street, which kicks off its annual reporting season tomorrow , when JP Morgan is expected to announce a record compensation pool of $29bn. It will be followed by rivals, with Goldman Sachs reporting next week.  Closer to home, Lord Myners, the City minister, backed comments from Royal Bank of Scotland chief executive Stephen Hester on the need to pay bankers appropriately.  “Major banks have paid very high bonuses and if we want RBS to play in a global world, it has to equip itself appropriately to do that,” Lord Myners told a Commons hearing. He said if pay were to be arbritarily restricted “the effect would be a significant erosion in the competitiveness of the bank”.
Wall Street&rsquo;s top bankers have apologised for their starring role in provoking    the global financial crisis as they brace themselves for details of a    looming $120bn (&pound;73bn) tax on profits.