British government outraged by RBS’ $1.47 billion bonuses

Britain was indignant at the plans of the Royal Bank of Scotland to pay a billion pounds in bonuses to its staff while the country suffers an increasing unemployment and deepening downturn, reports the Reuters. Alistair Darling, British finance minister, promised that the bankers responsible for money losses would not receive big cash compensations.

According to media reports RBS plans to pay out around $1.47 billion in bonuses this year, in spite of high losses it has just posted. Last year RBS applied for a 20-billion-pound government bail-out to stay afloat and as a result it is now 70% state-owned. Darling stated that he discussed the issue with RBS chief executive Stephen Hester, who assured that no one associated with the losses ‘should be allowed to walk away with large cash bonuses’.

Meantime, in order to soothe the British community RBS is said to reduce cash element of its bonuses to 25,000 pounds. But the bank itself reports that no decision on the bonuses was achieved yet. Opposition Conservative finance spokesman George Osborne noted that if the banks are determined to further proceed the same way the government will have to thouroughly consider mandatory caps on bankers' pay. Darling announced about his plans to initiate an independent review of banks' management and bonus structure.