Banks dig in heels over £7bn payouts

Bankers and politicians are to debate the level of bonuses being paid this year and to talk more about bank lending, mainly to small- and medium-sized businesses, later this month.

Ministers are urging the bank chiefs, led by John Varley, to show restraint. But the bankers are said to be set on paying out a £7bn bonus pool, and want the politicians to back the decision in return for more small business lending.