Washington - US banks paid out 1.6 billion dollars in bonuses to executives during the very height of the financial crisis, even as they were being bailed out by the government, the US Treasury Department said Friday. Yet the Treasury will not try to recover the money. The payments were 'ill-advised,' but not illegal or in violation of the public interest, said Kenneth Feinberg, known as the US 'pay czar' since being charged with determining salaries for bailed-out bank bosses. Feinberg found in a report that 17 banks doled out 1.6 billion dollars in bonuses to top executives between November 2008 and February 2009. That period saw Wall Street on the brink of collapse and the start of a 700-billion-dollar government rescue package to keep the US industry afloat. In mid-February 2009, Congress approved additional restrictions to its bail-out fund that forced banks to cut back on executive bonuses. Bonuses have long been a major source of public anger towards Wall Street, as many executives were blamed for causing a financial crisis that tipped the wider economy into its deepest recession in decades. US President Barack Obama in a speech from the White House said the report 'underscored' the need for a massive overhaul of financial regulation, which he signed into law earlier this week. Banks 'continued to pay out lavish bonuses at the height of the financial crisis, even as they expected billions of dollars in taxpayer assistance,' Obama said. The sweeping financial reforms extended government oversight over the industry, yet did little to specifically restrict bonus payments. Company shareholders were given the right to hold a non-binding vote on executive pay packages.

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