Britain's government and major banks have agreed a deal on bankers' pay and bonuses and the amount of loans they will grant to business, Chancellor of the Exchequer George Osborne said today.
He said total bonuses paid to British-based staff of Britain's four biggest banks will be lower than last year as part of the deal, which comes amid public anger over state funds used to bail out lenders during the financial crisis.
'This morning the heads of the major British banks - Barclays, RBS, Lloyds and HSBC - reached a new settlement with the British government,' Osborne told parliament.
'The banks will lend more money, especially to small businesses, pay more tax, pay less bonuses, be more transparent about the bonuses they do pay and make a greater contribution to our regional economy and society,' he said.
'The four major banks have also agreed that total bonuses will be lower than last year and lower than they would have been without today's settlement,' he added.
Osborne said banks would also make an 'additional £1.2 billion sterling contribution to society.' This would include £200m to capitalise the so-called 'Big Society Bank' - a scheme to fund charities and voluntary groups, he said.
He said anger would remain at the 'terrible mistakes of the banking industry and the failure of those who regulated it' - but added that anger 'will not bring one percentage point of economic growth or create one single new job.'
Meanwhile, Stephen Hester, the chief executive of state-backed Royal Bank of Scotland, will receive a shares-only bonus of £2.04m for last year, the bank confirmed today.
And Eric Daniels, the outgoing chief executive of taxpayer-funded Lloyds Banking Group, will receive a shares-only bonus of £1.45m for last year, the bank confirmed.
