RBS set to give bonuses whilst Obama caps bankers’ pay

Thursday 5th February 2009

It has been reported that bailed out Royal Bank of Scotland is poised to give ‘six figure bonuses’ to thousands of bankers and traders in the coming weeks.

The former banking giant is now 68% owned by the Government, and has received £20 billion in public money since October. Although it is expected to announce losses of up to £8 billion when its results are reported in three weeks, it has been said that the bonuses will run into tens of millions of pounds.

The chairman of the Commons Treasury Select Committee, John McFall has commented that banks need “a reality check”, adding: “Some of these banks are living in the shadows… life has changed and they need to face up to it.”

Meanwhile stateside, new President Barack Obama has calmed public discontent by issuing a pay cap of $500,000 (£343,000) for directors of companies that have sought Government aid.

Mr Obama stated: “To restore our financial system, we’ve got to restore trust. In order to restore trust, we’ve got to make certain that taxpayer funds are not subsidising excessive compensation packages on Wall Street.”

The President went on to say: “For top executives to award themselves these kinds of compensation packages in the midst of an economic crisis is not only bad taste, it’s bad strategy – and I will not tolerate it.”