IT is obvious from recent statements by the Prime Minister and the Chancellor of the Exchequer that they feel that they have paid adequate lip service to the cosmetic exercise of public condemnation of bankers' bonuses and it is back to business as usual ("Bonus culture 'rolls on' as RBS pays out £785m", The Herald, February 24).

For pragmatic reasons it may well be necessary to allow the Royal Bank of Scotland to follow its policy of bonus payments but there is no reason why these payments could not be paid at the end of a five-year cycle rather than annually. This would foster staff loyalty and allow bonuses to be paid conditional on true long-term improvements in the health of the business; it would also defuse some of the understandable public resentment and anger.

While it is true that the £45 billion of public money that has been used to acquire 83% of the shareholding in RBS must be protected and hopefully repaid, the manner in which Northern Rock was returned to private hands at a massive loss to the taxpayer suggests that this will never happen and we may well wave bye-bye to most or all of it. What is also overlooked is that the personal banking element of the RBS Group continues to be healthy and some taxpayers contributed a further £2 billion to the profit side of the balance sheet in this financial year. If bonuses had not been paid this year the bank may actually have recorded a small profit, which could only have improved the value of the taxpayers' shareholding in RBS.

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The scenario of eventually returning a healthy valuable asset to private investors who will not have shouldered the financial burden of restructuring the company could of course be avoided if the Government did what it is entitled to do and bought the remaining 17% of shares; it could withdraw the company from private ownership, making RBS a nationalised bank.

There would be no need for structural reorganisation or changes in operational policy and Stephen Hester would still be firmly in control of the tiller. The bonus culture could even be preserved and gone would be fears of fluctuating share prices. The taxpayer would own a substantial profitable asset, the value of which would dwarf our current investment in the business.

It has already been demonstrated that RBS is "too big" to be allowed to fail; if it was publicly owned and backed by the might of the Bank of England and the UK Government it would be bullet-proof.

Why should we nurse RBS back to health just to give it away at a bargain price to those who already have more than they need?

David J Crawford,

Flat 3/3,131 Shuna Street, Ruchill, Glasgow.

I AM concerned by what our banks are costing the economy. Between buying out the shares of these bankrupt institutions and propping up their balance sheets with quantitative easing the bill now stands at more than £300 billion. And now we learn that Lloyds and RBS have set aside some £4.2 billion pounds to settle claims for "mis-selling" payment protection insurance, not to mention the bonuses paid for these invaluable services.

This is the stuff of headlines but it is more than matched by the hidden subsidies received by the banking industry.

The Bank of England estimates that the derisory interest rates paid to savers and pension funds costs us £100 billion a year whilst inflation rockets up in direct ratio to the volume of cheap credit which funds the demimonde of derivatives and shadow banking – the next seismic event waiting in the financial wings.

When I hear that an independent Scotland could not have afforded to bail out these banks and we would require the Bank of England as a lender of last resort then perhaps we do not deserve independence. If it is beyond us to even contemplate a better arrangement then perhaps we will all end up like Greece – on the cusp of self-destruction, and all because we can't get a grip on the banking system.

RF Morrison,

Millig, 29 Colquhoun Street,