Govt 'must reform RBS and Lloyds before selling stakes'

13 April 2012

The UK government must be more proactive in its attempts to curb salaries offered by the country's partly state-owned banks before selling stakes in the companies.

That is according to Eric Chalker, director of the UK Shareholders Association, who believes it is essential for the coalition to take measures soon as public anger towards wages handed out by Lloyds and Royal Bank of Scotland (RBS) grows.

Speaking to Reuters, Mr Chalker noted it has now become a truism that "senior bank pay is grossly excessive and, some would say, immoral", meaning the administration should react to these feelings.

At the height of the financial crisis, the government had to use taxpayers' funds to bailout RBS and Lloyds and consequently now controls respective stakes of 82 per cent and 40 per cent in the lenders.

Recently, the Conservative-Liberal Democrat alliance has began the process of selling these shares back to the private sector, but Mr Chalker insisted it must first implement a "sea change in director behaviour".

By Gary Cooper

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