Business Secretary Vince Cable would not be drawn on whether the government should reject any attempt by RBS to exceed the EU bonus cap but urged the bank to "show restraint", during an interview with ITV News.
Bank of England Governor Mark Carney said that he "absolutely" agreed with the Parliamentary Commission's comments on the EU bonus cap that concluded: "We're not convinced that a crude bonus cap is the right instrument for controlling pay."
He also said that he had "no reason to disagree" with comments from the Independent Commission on Banking (ICB) that capping market share and balance sheet size "would not result in substantial improvements to competition in retail banking in the UK."
Thousands of RBS staff are struggling to feed their children and pay their utility bills as they earn so little. They, along with taxpayers, have every right to expect this Government to block any attempt to further reward these senior bankers.
The hypocrisy of George Osborne in claiming that 'it is totally unacceptable for bank bonuses to be paid on the back of taxpayer guarantees' will disgust working people.
In a speech warning of the need for EU reform, Chancellor George Osborne said that EU rules on bankers' pay would lead to a "Fred Goodwin-style situation" in which money would not be recoverable
"These European rules will not lead to bankers being paid less," he said. "What they will lead to is a Fred Goodwin-style situation where you will not be able to get money back off bankers when things go wrong."
"That is precisely what we have been trying to get away from in Britain," the Chancellor added.