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RBS in firing line over bonus plans

RBS, which is 84 per cent owned by tax-payers, will make a final decision on payouts at the end of January at the earliest.

Business Secretary Vince Cable and Chancellor George Osborne are due to hold crisis talks with the chief executives of the country’s biggest banks today. Cable has threatened new transparency rules if the banks refuse to put their houses in order – describing the bonus culture as “scandalous” and a “poisonous fungus” that has been allowed to flourish “in the dark”.

In an interview with Real Business earlier this month, Cable said he was committed to “putting in place a banking system that’s fit for purpose, secure, safe and stable”. He said that the Independent Commission on Banking, set up in June and chaired by former Bank of England chief economist Sir John Vickers, will look at the “structure of banking in the UK and consider wholesale reform”. That report, however, isn’t due out until September 2011.

David Cameron last week warned that banks should prepare for further taxes if they plan to pay out billions in bonuses, while Deputy PM Nick Clegg told the Financial Times that the government would not “stand idly by” if bonuses paid early next year were unacceptable. Let’s hope he sticks to his word (unlike when it came to university tuition fees).

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