RBS boss defends bonus in wake of LIBOR scandal

LONDON (AFP) ― Royal Bank of Scotland boss Stephen Hester defended his right to a bonus on Monday, one week after the bank was fined $612 million over LIBOR rate rigging.

“I think that my bonus should be assessed on all of the things I do well and badly and judgment should be reached,” Hester told lawmakers on the Parliamentary Commission on Banking Standards.

“It’s not me who makes a judgment,” he added, when questioned whether he would turn down his bonus for last year.

British taxpayers own 81 percent of RBS after it was bailed out at the height of the global financial crisis in 2008 with $45.5 billion of taxpayers’ cash.

“I think that if you look at the RBS that we took on four years ago or so, that we have done huge things to rescue a situation for the company and for society and for its shareholders, which included hundreds of billions of pounds of risk that the country was exposed to which it is not exposed to any more.”

He added that he had managed to get the taxpayers “off the hook” for huge liabilities over the past four years.

RBS said last week that it would pay $391 million to British and U.S. regulators, becoming the third bank to admit its part in the LIBOR affair after Barclays and UBS.

The Edinburgh-based lender has already said that it would recoup about $300 million from its staff bonus pool and by clawing back previous pay awards.

RBS chairman Philip Hampton added Monday that Hester’s pay was “modest” compared with his peers.

“Stephen is doing one of the most difficult demanding jobs in world business because RBS was the biggest banking failure in the world and Stephen took it on an exceptionally difficult time,” he told lawmakers.

There is meanwhile considerable pressure for senior bank executives to take responsibility for the LIBOR crisis.

As a result, RBS announced last week that John Hourican, chief executive of its Markets and International Banking division, was to leave the group and forfeit his 2012 bonus and long-term incentive shares.

“There had to be a serious captain-on-the-bridge departure,” Hampton added on Monday.

“We think that appropriate accountability is sometimes necessary in all walks of life.”