This is the way it should have been in the US as well. Let the banksters make a profit before they ask for a bonus.
The former deputy prime minister John Prescott called on the Treasury to rule out any bonuses and the shadow chancellor, George Osborne, told bankers: "The party's over."
The Treasury announced it had commissioned an independent review of the reward policies at banks, but the chancellor, Alistair Darling, admitted that existing contractual obligations between RBS and its employees may mean bankers still receive handsome bonuses. It has been suggested the bank has set aside a bonus pot of £1bn for its 177,000 employees. There is growing anger that bankers who mishandled billions in the run up to the recession may still be rewarded despite RBS being propped up by £20bn in taxpayers' money.
Sir Fred Goodwin, the former chief executive of RBS, and Sir Tom McKillop, the former chairman, will face some of this opprobrium when they give evidence to the Treasury select committee this week.
Speaking on BBC1's Sunday AM programme, Darling said he had reached an agreement with the new chief executive of RBS, Stephen Hester, that no one "associated with losses" should be rewarded. However he appeared to concede RBS bankers were likely to receive bonuses out of sync with performance in 2008, with losses running into billions set to be outlined in three weeks. The chancellor said: "Obviously there are contractual problems with some staff."
RBS also wanted to make sure they have slimmed bonus payments down to the absolute minimum, the chancellor said. "They have to understand that these banks would not be here but for the British taxpayers, therefore they have to show the degree of restraint that people would expect," he said.
