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| Brown: 'No reward for failure' | |
| (about 2 hours later) | |
| The Prime Minister has insisted there should be "no reward for failure" at banks which have had to be bailed out by the taxpayer. | |
| Gordon Brown stressed that top executives at those banks had left without severance pay and bonuses. | |
| The new boards would not be receiving any cash bonuses and there would be no dividends for shareholders, he added. | |
| Mr Brown also said he "strongly agreed" with the approach to executive pay being taken by President Obama. | |
| The PM was speaking one day after the US President announced a $500,000 (£355,000) limit on executive pay at US firms that needed fresh government aid. | |
| Wall Street paid $18.4bn (£12.7bn) in bonuses in 2008 and $32.9bn (£22.7bn) in 2007. | |
| However Mr Brown stopped short of saying the government would impose a similar salary cap. | |
| RBS warned | |
| Earlier, Business Secretary Lord Mandelson warned Royal Bank of Scotland that it risks alienating ordinary people if it gave its traders and bosses "exorbitant" bonuses. | |
| His comments came after a report in The Times said the firm is to award large bonuses, despite expectations of huge annual losses. The banks have got to be sensitive to public opinion and I think they need to think about what is the best way forward Business Secretary Lord Mandelson See RBS share priceObama unveils executive pay cap | |
| "Please be mindful about how this looks and what public opinion will be," said Mr Mandelson. | "Please be mindful about how this looks and what public opinion will be," said Mr Mandelson. |
| The recently bailed-out bank said its pay policy had yet to be decided. | The recently bailed-out bank said its pay policy had yet to be decided. |
| RBS told the BBC: "The board has yet to decide on remuneration policy for the year." | |
| "We have previously announced that the Board will receive no bonuses in 2008 and if there are any bonuses for 2009 they will be paid in shares." | "We have previously announced that the Board will receive no bonuses in 2008 and if there are any bonuses for 2009 they will be paid in shares." |
| Record loss expected | Record loss expected |
| RBS, which is set to be 70% owned by the government, is due to release its annual earnings results on 26 February. | RBS, which is set to be 70% owned by the government, is due to release its annual earnings results on 26 February. |
| It has already said that it expects to report write-downs of between £7bn and £8bn in 2008. The forecast caused shares in the bank to plunge 67%. | It has already said that it expects to report write-downs of between £7bn and £8bn in 2008. The forecast caused shares in the bank to plunge 67%. |
| Analysts predict it will report a record annual loss for 2008, beating the £15bn loss posted by Vodafone in 2006. | Analysts predict it will report a record annual loss for 2008, beating the £15bn loss posted by Vodafone in 2006. |
| According to The Times newspaper, RBS paid out £1.83bn in remuneration in 2007, most of which is thought to have been in bonuses. | According to The Times newspaper, RBS paid out £1.83bn in remuneration in 2007, most of which is thought to have been in bonuses. |
| Speaking at the launch of a £3bn cash injection to boost lending to small businesses, Lord Mandelson said: "Of course you have got to do all you can to recruit the best people and keep the best people in place - there is a huge job on our plates. | Speaking at the launch of a £3bn cash injection to boost lending to small businesses, Lord Mandelson said: "Of course you have got to do all you can to recruit the best people and keep the best people in place - there is a huge job on our plates. |
| "On the other hand the banks have got to be sensitive to public opinion and I think they need to think about what is the best way forward." | "On the other hand the banks have got to be sensitive to public opinion and I think they need to think about what is the best way forward." |