Northern Rock announces £1.4 billion loss and plans for bonus payments
The UK Treasury has this evening become embroiled in a new bank bonus row after plans were released to pay bonuses to both directors and those below director level at Northern Rock. While the company refused to put an exact figure on the proposed bonus scheme a spokesman also refused to confirm there would be a 10% salary cap on any bonuses paid.
This could not have come at a worse time for the UK government as Northern Rock is wholly-owned by the UK authorities and this latest move seems to fly in the face of the recent attacks on the UK banking sector. Effectively the UK government is looking to "reward failure" at a time when the likes of the Royal Bank of Scotland have been put under serious pressure to drastically cut back any potential bonus payments.
Many believe that the scandal emerging from this announcement could finish off Gordon Brown as confusion continues to reign and the UK taxpayer appears to be in the firing line yet again. There was also the announcement of a return to the mortgage market for Northern Rock only weeks after the company was literally paying customers to transfer their mortgages to competitors. What exactly is going on?
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