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Is the UK government being held to ransom by the banking sector?

As news that 80,000 Royal Bank of Scotland members of staff are set to sue the government over their bonus scheme continues to filter into the market, there is a feeling that the UK government is being held to ransom by the banking sector. Despite the fact that banks in the UK have literally been saved from receivership by the billions of pounds pumped into the industry it appears as though banking staff and banking directors are not happy. In the real world more and more people in the UK are losing their jobs, with no income never mind a bonus payment, as the banking industry seems to be bleeding the UK taxpayer dry. How can this happen?

In basic terms the UK government have made a number of serious errors during the rush to introduce rescue packages which have been arranged over the last few months. Legally binding changes to various contracts should have been made at the same time because in effect, even though the government is the majority shareholder in some UK banks, they have no say in day-to-day payments and historic salary arrangements. Despite trying to wriggle out of legally binding obligations the UK government and the UK taxpayer seems set to be hit with more costs in the short to medium term.

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