British PM gives banks new bonuses warning

9th January 2011, Comments 0 comments

British Prime Minister David Cameron warned the country's banks Sunday to give smaller bonuses than last year, saying he understood public anger at payouts by state-rescued lenders.

His comments followed reports that the chief executive of bailed-out Royal Bank of Scotland, Stephen Hester, would be paid 6.8 million pounds (8.2 million euros) in bonuses and salary this year.

"On the general (level) I want to see the bonus pool smaller than last year, on the specific, Royal Bank of Scotland, as you rightly say, is owned by the Government," he said.

He said the figures quoted for Hester were "pure speculation" but added: "They (RBS) should not be leading the way on bonuses."

But the Conservative premier refused to condemn banks outright for the financial crisis, saying that governments and regulators were also to blame and that they were crucial for the British economy.

Asked about public anger over bonuses, Cameron replied: "I feel it because frankly the whole country has suffered from irresponsible lending practices, irresponsible behaviour.

"But we need to recognise though that there were a lot of people to blame for the mess we are in and that we shouldn't just think it's an easy scapegoat to pick one in view."

The bonuses issue has plagued Britain's coalition government since it came to power in May, as it steers a course between the policies of the centre-right Conservatives and their junior partners, the centrist Liberal Democrats.

In December, Liberal Democrat Deputy Prime Minister Nick Clegg warned banks that the government would not "stand idly by" if they paid out huge bonuses while failing to increase lending.

Clegg has faced a torrid time in the coalition's fight to hike university tuition fees, which have sent his party's ratings plummeting.

© 2011 AFP

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