Business

Many bankers overpaid, says RBS's Sir Philip Hampton

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Media captionSir Philip Hampton told the BBC's Robert Peston in January last year that some bankers are overpaid

Large numbers of bankers are paid more than they are worth, the chairman of Royal Bank of Scotland has said.

Sir Philip Hampton told BBC Two's Britain's Banks: Too Big to Save? that too many average investment bankers were getting above average pay.

"The star quality, as it were, seems to filter down to people who don't seem so star quality," he said.

Meanwhile, the Bank of England's deputy governor said banks must be allowed to fail without taxpayers paying the bill.

Sir Philip, speaking to BBC business editor Robert Peston, said that investment banking had some really high achievers, people "who really do make a difference".

But they were surrounded by people who were not such stars, he said.

"And the disparities between the top stars in the team and some of the journeymen players, if you like, is probably not as marked as it should be," Sir Philip said.

Sir Philip's comments come as the big banks decide how much to pay out in bonuses for performance in 2010.

Prime Minister David Cameron and Labour Party leader Ed Miliband have traded blows over reports that the government has accepted that it can do little to rein in bankers' pay and bonuses.

This is despite the bank bail-out and the government taking direct stakes in Lloyds Banking Group and RBS.

Interviewed for the same programme, the deputy governor of the Bank of England, Paul Tucker, said the serious flaw in the current banking system was that the bankers had got rich in the boom years while the cost of their failures had been heaped on the taxpayer.

He said the priority for the coming year was to reform the banking system to allow banks to go bust like any other kind of business, with their losses falling on creditors and investors, not the taxpayer.

Britain's Banks: Too Big to Save? BBC Two, 2100 GMT on Tuesday.

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