Bosses of failed banks face quizzing
The former bosses of two of the biggest casualties of the banking crisis were quizzed by MPs on Tuesday amid mounting public anger over bonuses for staff.
RBS former chief Sir Fred Goodwin and ex-HBOS chairman Lord Stevenson of Coddenham were among bankers facing questions at the Treasury Select Committee over mistakes which led to banks being bailed out by the government.
The pair began by apologising for their roles in the crisis.
"I apologised in full and I'm happy to do so again," Goodwin told the committee.
They were later to be questioned over bonuses amid reports that the Royal Bank of Scotland (RBS) is planning reward payments for senior executives and traders that could total hundreds of millions of pounds.
Amid growing anger over the issue, Prime Minister Gordon Brown called time on Monday on the current culture of big bonuses for City of London bankers.
Britain has launched two rounds of bank bailouts worth hundreds of billions of pounds and the government has taken huge stakes in household names such as RBS. The new Lloyds Banking Group, formed after the rescue of HBOS by Lloyds TSB, is also now 43 percent owned by taxpayers.
Brown said that board members of British banks who have received state help would not receive cash bonuses this year, while banks would not pay or receive dividends either.
The Treasury is also considering capping cash bonuses for bankers at £25,000 in a bid to quell the anger over the City's culture of huge rewards and dangerous risk taking, the Guardian reported on Tuesday.
The public grilling of the bankers comes after School's Secretary Ed Balls, a close ally of Brown, reportedly warned that the current economic downturn will be worse than the Great Depression.
Balls told a conference at the weekend that the crisis was the most serious global recession for "over 100 years," according to the Yorkshire Post newspaper.
Britain is officially in recession for the first time since 1991, figures confirmed last month. In the last quarter of last year, the economy contracted by 1.5 percent to mark the sharpest slowdown since 1980.
The banking sector was hammered last year by the international credit crunch amid fears about the sector's exposure to toxic debt.