Banker bonus points
Don't be surprised that most attention to today's appearance before the Treasury select committee by Stephen Hester is focussed on his talk of banker bonuses.
There's an election coming, and bonuses are the bit of an otherwise complex story that the public can latch on to. Angrily.
On a basic salary of £1.2m, and nearly £10m more if the chief executive can turn around the Royal Bank of Scotland's share price over a sustained period, even Ma and Pa Hester think he earns too much.
He wasn't saying how much bonus will be paid out, until it is calculated and confirmed late next month. But asked how he was going to face the public backlash, he admitted "I thought I might go on holiday for a long time". That was a joke, I think.
The rationale for continuing big bonuses is that it's the market rate.
RBS is "a prisoner of the market", though he didn't quite add that he's also a prisoner of the government as his majority shareholder. And it's tricky to be in two prisons at once.
The chief exec said he had not negotiated his pay when he joined as a battlefield promotion in October 2008.
But he did take the time back then to insist that his bonus shouldn't be seen as reward for failure. Great was the talk of deferred share payments for his staff, and clawback if targets are hit but business then unravels.
The RBS are truly world leaders at deferring bonuses.
Worth noting also was what Mr Hester was saying about other aspects of RBS business.
He's got a cautious manner, but this was the boss sounding relatively upbeat about the prospects of getting back into the black during this year. The balance sheet is down by £500bn, he pointed out. That's half a trillion pounds less exposure.
For all the complaints about a lack of lending, he said you've got a nine in 10 chance of getting a mortgage approved, and an 8.5 in 10 chance of a business loan.
Mortgage lending targets will be "handsomely exceeded", not least because so many other lenders have departed from the market.
But business lending doesn't look like it's going to hit the targets set by his chief shareholder.
Meanwhile, the slackness of demand for credit from debt-averse existing customers has £30bn of arranged overdrafts sitting in the RBS vaults without being used.
For those in a whole lot of trouble, debt has been converted to equity. As a result, how many companies does RBS now own? Stephen Hester didn't know. A thousand? Probably lots more.
The bit that tends to get forgotten amid the public fury at billions being distributed to top RBS staff at the end of next month, is that Mr H has got a bit of a morale challenge on his hands, with well over 100,000 still on his payroll.
Keeping them motivated, when they feel they're being held to a different standard when compared with other banks, is his "single greatest business problem".
What I sense when I watch bankers being grilled by their new political masters is that the politicians seem to think the humbling of the banks should come with some sacrifice.
They struggle to understand that bankers don't have a strong sense of public service, and being publicly owned hasn't created one. They're in it for the money - which happens to be what many people think of MPs.
Assets under pressure
Meanwhile, down the tram track currently under construction between RBS HQ and Edinburgh city centre, there's an another unwelcome type of bonus emerging from the international response to the financial crisis.
So says Scottish Financial Enterprise today, representing not just the troubled banks but also the less troubled insurance and asset management sectors. They're subject to the law of unintended consequences.
Chief executive Owen Kelly has today fired off a lobbying volley at Brussels, criticising its plans to regulate hedge funds.
This is seen as being aimed at the vast and under-regulated sector mainly active in London's Mayfair and off Wall Street, which was driving the leveraged asset bubble.
Edinburgh (with a growing big player in Aberdeen and another in Dundee) failed to attract much hedge fund activity through the boom years, but Scotland does do asset management rather well.
The Scottish concern is that that strength is going to be severely undermined by the additional unwelcome burden of duplicate regulation.
The claim is that the draft directive, if it stands, could affect savers, pension holders and investors, and while it might level the playing field across Europe, it would limit European finance houses' ability to do business with Asia on competitive terms.
According to Owen Kelly: "While it would have a negative impact in the City (of London), it could do even more damage in Scotland because we have a particular strength and expertise in investment management.
"It is not better regulation - just more, overlapping, regulation that would bring restrictions without benefits".