Breaking the bank

As the bank, which is 84 per cent owned by the taxpayer, unveiled its latest plan to award many of its top earners yet more public money, one can only wonder what Mr Hester's family made of the announcement. The

mood of the rest of Britain is easier to divine: simple anger.

There can be no justification for such large bonuses, especially as the country's economic recovery remains so sluggish. Mr Hester, who earns 1.2m in basic salary, could reap as much as 4.8m in shares on top of this.

While he is making progress in turning round the bank, which has been left stricken by a series of botched investments and acquisitions, it still posted a 3.6bn loss for last year, with bad debt and other impairment charges rising to 13.9bn. Even in the upside down world of banking, this does not look like a performance worthy of such high reward.

In a response that was both incredible and unsurprising, Philip Hampton, the RBS chairman, defended Mr Hester's pay. For him to say that the chief executive would be paid "fairly, appropriately and at market levels for achievement" as the recovery takes shape shows how out of touch the bank remains, despite facing more than a year of public and political pressure.

As such, the Government has to compel RBS to behave more responsibly. That it has failed to do so until now is a cause of expense and embarrassment to this country. Ministers must force a rapprochement of markets and morality – something which Mr Hester's parents would no doubt approve.