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Banking: Bonuses

House of Lords written question – answered on 24th January 2011.

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Photo of Lord Higgins Lord Higgins Conservative

To ask Her Majesty's Government to what extent the bonus pool of the Royal Bank of Scotland is related to its performance; and to what extent payments from it to individuals are related to their performance.

Photo of Lord Sassoon Lord Sassoon The Commercial Secretary to the Treasury

The Government are clear that remuneration policies at banks need to reward long-term sustainable performance and not incentivise short-term excessive risk taking. The Financial Services Authority's revised Remuneration Code ensures remuneration policies are consistent with effective risk management and imposes strict rules that ensure significant portions of the remuneration paid to material risk takers are deferred and linked to the performance of the individual and the firm.

The Government have made it clear to the Royal Bank of Scotland that they should have a smaller bonus pool than last year, and that it should be a back-marker in the industry.

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