Bloomberg reports that Deutsche Bank has set aside 31% more for staff compensation over at its corporate and investment banking unit this year, after posting decent third-quarter results thanks to strong sales and trading revenues.

The German bank has allocated $6.25bn for pay and benefits in the first nine months of the year, an average of $440,000 each for the unit's 14,208 employees.

Shareholders in Lloyds Banking Group can at least take some heart from their predicament after acquiring HBOS. It could have been worst - the bank was apparently in discussions in early 2006 about buying ABN AMRO!

And The Daily Telegraph reports that Goldman Sachs has denied any suggestion that the firm may have been paid for passing on confidential information to hedge fund Galleon Group, which is being wound down following allegations of insider trading made against founder Raj Rajaratnam. The Financial Times reported earlier this week that Galleon paid some $250m in 2008 to a variety of investment banks for information that would give it an edge.

In the meantime, Bloomberg is reporting that Rajaratnam is seeking to have his $100m bail bond slashed to just $25m, and The New York Daily News says that the hedgie remains confident that he will clear his name if his case comes to trial. The Financial Times is now reporting, however, that JPMorgan appears to have experienced doubts about Galleon as far back as 2001. The newspaper quotes from an internal JPMorgan note, which warns that the hedge fund 'liked to operate in grey areas', and suggested that the bank 'should reduce our allocation' in Galleon's technology fund.

And The Wall Street Journal reports that German police have arrested Helmut Kiener, the founder of hedge fund K1, which is thought to have embezzled millions from a number of banks. The Times reports that Barclays may have lost as much as $220m from exposure to the fund.

Finally, The Evening Standard reports that cocaine use in back up in the City, and it's put down to job loss concerns and anxiety. But with most of the big lay-offs over, Here Is The City feels that this is tosh. If cocaine use is on the up, it can only be for one reason - bonuses are going to be higher this year-end, and bankers are feeling more flush!

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