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| Version 2 | Version 3 |
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| Bankers 'need to join real world' | Bankers 'need to join real world' |
| (about 2 hours later) | |
| A government minister has told bankers "to come back into the real world" after Royal Bank of Scotland directors threatened to resign over bonuses. | A government minister has told bankers "to come back into the real world" after Royal Bank of Scotland directors threatened to resign over bonuses. |
| City Minister Lord Myners said it was unrealistic that bankers should expect to be paid million pound bonuses. | City Minister Lord Myners said it was unrealistic that bankers should expect to be paid million pound bonuses. |
| RBS reportedly wants to pay a total of £1.5bn in bonuses to investment banking staff, and the board has threatened to quit if the government blocks the move. | RBS reportedly wants to pay a total of £1.5bn in bonuses to investment banking staff, and the board has threatened to quit if the government blocks the move. |
| The Treasury said it would intervene if it was in the interest of taxpayers. | The Treasury said it would intervene if it was in the interest of taxpayers. |
| Legal duty | Legal duty |
| Lord Myners has estimated that at least 5,000 bankers in the UK will earn more than £1m this year. | Lord Myners has estimated that at least 5,000 bankers in the UK will earn more than £1m this year. |
| He told the BBC that the median wage in the UK was just over £20,000 a year, and yet some bankers expected as a matter of course to receive bonuses, in addition to their salaries, of millions of pounds. | He told the BBC that the median wage in the UK was just over £20,000 a year, and yet some bankers expected as a matter of course to receive bonuses, in addition to their salaries, of millions of pounds. |
| In this nightmarish predicament of his own making, should [the chancellor] sanction the $20m payments or muller the bank? Robert Peston, BBC business editor Read Robert Peston's blog Send us your comments | In this nightmarish predicament of his own making, should [the chancellor] sanction the $20m payments or muller the bank? Robert Peston, BBC business editor Read Robert Peston's blog Send us your comments |
| He also said banks needed to be mindful of the fact that much of the profit they were now making was due to "the benign conditions" created by the government pumping billions of pounds into the economy to stimulate demand. | He also said banks needed to be mindful of the fact that much of the profit they were now making was due to "the benign conditions" created by the government pumping billions of pounds into the economy to stimulate demand. |
| RBS directors say it is their legal duty to act in the interests of shareholders, and that if they do not pay competitive bonuses, top talent will leave the bank. | RBS directors say it is their legal duty to act in the interests of shareholders, and that if they do not pay competitive bonuses, top talent will leave the bank. |
| This would have an adverse impact on profitability, and therefore the bank's ability to repay the taxpayer, they argue. | This would have an adverse impact on profitability, and therefore the bank's ability to repay the taxpayer, they argue. |
| 'Pushed around' | 'Pushed around' |
| Business Secretary Lord Mandelson said: "I understand the point that RBS directors are expressing - they say they have to remain competitive in the market in recruiting senior executives, and this is why it's important that all the banks are equally restrained, and RBS is not singled out." | Business Secretary Lord Mandelson said: "I understand the point that RBS directors are expressing - they say they have to remain competitive in the market in recruiting senior executives, and this is why it's important that all the banks are equally restrained, and RBS is not singled out." |
| But Liberal Democrat Treasury spokesman Vince Cable said the government should "call the bluff" of the RBS directors and accept their resignations. | But Liberal Democrat Treasury spokesman Vince Cable said the government should "call the bluff" of the RBS directors and accept their resignations. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| "The government has to impose itself and must not be pushed around," he told the BBC. | "The government has to impose itself and must not be pushed around," he told the BBC. |
| One banking analyst went a step further, suggesting the directors should be sacked. | One banking analyst went a step further, suggesting the directors should be sacked. |
| "Their job is very simple - to fulfil the requirements of the shareholders. If we tell them to paint everything blue, everything has to be blue," said Ralph Silva at SRN. | "Their job is very simple - to fulfil the requirements of the shareholders. If we tell them to paint everything blue, everything has to be blue," said Ralph Silva at SRN. |
| "They should not be going up against shareholders. I think we should fire them [before they resign]." | "They should not be going up against shareholders. I think we should fire them [before they resign]." |
| But he did argue that the government would be making a mistake if it told the bank not to pay bonuses. The best bankers who brought in the most profit would leave, he said. | But he did argue that the government would be making a mistake if it told the bank not to pay bonuses. The best bankers who brought in the most profit would leave, he said. |
| For this reason, he said the bonuses would be paid. | For this reason, he said the bonuses would be paid. |
| The government owns 70% of RBS after bailing out the bank during the height of the financial crisis, a stake that is set to rise to 84% following the Treasury's recent pledge to inject billions more into the bank. | |
| Last month, Chancellor Alistair Darling announced that the Treasury, as the major shareholder in the bank, would have the "right to consent" to how much RBS pays in bonuses and how they are paid. | Last month, Chancellor Alistair Darling announced that the Treasury, as the major shareholder in the bank, would have the "right to consent" to how much RBS pays in bonuses and how they are paid. |
| RBS is said to want to pay £2bn in bonuses across the group for its performance in 2009, with £1.5bn going to its investment banking division, which is expected to make £6bn in profits this year. | RBS is said to want to pay £2bn in bonuses across the group for its performance in 2009, with £1.5bn going to its investment banking division, which is expected to make £6bn in profits this year. |