Treasury in talks over bonuses and lending

Talks are still taking place this weekend between the banks and the Treasury over bonuses and lending targets.

Treasury sources said there are sticking points over the level of bonuses which the banks – Royal Bank of Scotland, Lloyds and Barclays – plan to pay staff and the amount of net lending to be pledged to small businesses. John Varley, the former chief executive of Barclays, is leading the talks code-named Merlin.