Investment bankers are about to enjoy a record bonus season as confidence surges in the financial markets.

Just 12 months after the global economy was brought close to collapse by reckless lending — forcing banks to turn to taxpayers for help — stock markets in London and New York are enjoying one of the strongest bull runs in decades and investment banks are preparing to announce huge profits.

In Britain, job losses slowed in the three months to August. Unemployment rose by 88,000 to 2.47 million, the lowest rise since July last year, and youth unemployment fell slightly. China reported strong trade figures and oil hit a high for the year.

Goldman Sachs, which employs 5,500 people in London, is expected to report a sharp rise in third-quarter profits today. Analysts estimate that, barring a major setback, the average London worker at Goldman will receive about $748,000 (£467,000) in salary and bonuses — 13 per cent higher than 2007 and more than double the 2008 average.

J.P. Morgan Chase, which also has a large London workforce, posted a 72 per cent rise in third-quarter net profits to $3.6 billion.

The news came as the risk-taking culture in banking went on trial in America. Two Bear Stearns managers, Ralph Cioffi and Matthew Tannin, are accused of lying to investors to save their bonuses.

Senior executives from all the major foreign-owned investment banks were summoned to the Treasury yesterday and told that they would not win lucrative government contracts unless they signed up to a code of conduct policed by the Financial Services Authority.

Bank of America, Citigroup, UBS and Nomura, which bought the London arm of the failed bank Lehman Brothers, have agreed to abide by the regime, which is designed to ensure that bonuses are spread over long periods, paid largely in shares and can be clawed back if performance turns out to have been less strong than thought. British banks have already agreed to comply. Other countries are close to making similar deals with banks.

Bankers say that the code is worded in such a way that there is enough wriggle room for all but the most senior to take large parts of their bonuses immediately in cash.

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