George Osborne condemned “totally unacceptable” behaviour at Royal Bank of Scotland today after it was fined £391 million for rate-rigging.
The Chancellor insisted the taxpayer would not pick up the bill for wrongdoing after the majority state-owned bank reached a settlement with UK and US regulators over Libor manipulation.
RBS will recoup around £300 million from its staff bonus pool and by clawing back previous awards, while investment banking boss John Hourican will step down, forfeiting his 2012 bonus and long-term incentive shares.
Speaking at a press conference this afternoon, Mr Osborne said: "What happened at RBS and other banks is totally unacceptable. At my insistence the banks not the taxpayers will pick up the bill...
"Those responsible will face the full force of the law."
Mr Osborne said it was "right" that the RBS management had taken action.
He also said the money from the fines would go to people who had showed the "best of British values", including those who had fought for the country.