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Cable urges RBS to 'show restraint' on bonuses

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.

Read: BoE Governor says UK a 'hard touch' on bankers' pay

He told Deputy Political Editor Chris Ship that the bank, which is 81% owned by the taxpayer, had not so far come forward with any propositions on bankers' bonuses.

Under EU laws, a bonus awarded to a banker that is over double their annual salary has to be approved by shareholders.

As Chancellor, Mr Osborne is effectively the bank's main shareholder.

Read: Banks, bonuses and the Big Five

BoE Governor: UK a 'hard touch' on bankers' pay

Bank of England Governor Mark Carney said the UK already had a "hard touch" regime in relation to bankers' pay and criticised the EU cap on bonuses.

Mr Carney said the cap would partly reverse the changes that have been made to be able to recover bonuses from bankers.

It takes back some of the advantages of the approach that we have had because it will incentivise more cash compensation today - exactly the type of problem we had before - that we can't claw back.

We would rather see more deferral, more equity [share-based payout] and this ability to take it back when those risks come to light.

– Mark Carney, Bank of England Governor

He also denied the suggestion that regulators had "dropped the ball" over bankers' pay.

Read: Banks, bonuses and the Big Five


MPs reject Labour motion to cap RBS bonuses

ITV News Deputy Political Editor Chris Ship has tweeted:


MPs reject Labour motion to cap bonuses at RBS at 100% of salary. Maybe they were listening to BoE Governor who also thought it was bad idea


241 MPs backed the Labour motion on bonuses. 304 against

Carney 'agrees' bonus cap is not right way to control pay

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."

Read: Banks, bonuses and the Big Five


PM: Government will veto any RBS bonus increases


Cameron: any proposals to increase bonus bill at RBS we will veto it. He's talking about the overall bonus pot here - not individual bonuses


Cameron: rich to get a lecture from Labour on bonuses when they created the problem. <<This is where Labour is weak #pmqs


EdMili: When you earn £1 million per year - a bonus of £1 million should be enough <<Hard to argue with that #pmqs

Unite attacks Osborne 'hypocrisy' over RBS bonuses

As George Osborne claimed that EU rules on bankers' pay would lead to a "Fred Goodwin-style situation", Unite said the Chancellor "must not rubber stamp the corporate greed" at RBS, as the majority taxpayer-owned bank reportedly seeks to double its cap for bonuses to senior staff.

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.

His decision on RBS will show his true colours.

– Rob MacGregor, national officer of Unite

Read: How the 'Big Five' bank bonuses compare

EU rules on bankers' pay 'will lead to Goodwin situation'

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.

Read: Osborne: EU must reform or face economic decline

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