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Royal Bank of Scotland insists bonuses will be paid

The Royal Bank of Scotland has today confirmed a loss of £1 billion at the halfway stage for 2009 and sought to clarify the situation regarding staff bonuses. Despite the fact that the bank made a loss in the first half there are many large "guaranteed" bonuses to be paid even though the bank is 70% owned by UK taxpayers and being propped up by the UK government in other ways.

If the UK authorities are unable to control the bonuses paid at a bank which is 70% owned by taxpayers, what chance do they have of dictating to the banks which are wholly owned by institutions and individual shareholders?

As we have mentioned on numerous occasions, the UK government and the UK regulators seem determined to control future remuneration packages in the banking sector although ultimately despite all the hustle and bustle this is proving nigh on impossible. Are the politicians telling taxpayers what they want to hear or are they really adamant that they can and will control the UK banking sector in the future?

So far there has been little response from the government with regards to results announced by Lloyds bank and Royal Bank of Scotland or indeed the general trend of the UK banking sector. Surely the authorities need to put the record straight with regards to future regulation and future remuneration?

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