Stephen Hester, the chief executive of the Royal Bank of Scotland (RBS) has defended his forthcoming bonus by saying he should be judged on saving the bank "for the benefit of society and stakeholders".
Hester, who will receive a regular salary of £1.2 million plus a bonus of £800,000, told the Banking Standards committee that bonuses should be assessed on "all the things I do well and badly".
"I think that is entirely proper for me and the board and management team to be assessed on things done and not done - and I believe this nation is off the hook of a lot of bad things, not yet all the way off all of the hook, but there was never any prospect we could have discovered or fixed everything immediately," he said.
He added that he and the team had done "huge things" for RBS, which had rescued the bank "for the benefit of society and stakeholders".
Hester's chairman Sir Philip Hamilton defended his pay and bonus, saying the RBS chief received far less than the going average for banking chief executives.
Also on the subject of bonuses, Sir Philip confirmed former senior bankers who had received bonuses during the time of London Interbank Offer Rate (Libor) manipulation may be asked to hand back some of their bonus – although he admitted the call was likely to fall on deaf ears.
"We are considering it, but the amount involved would be de minimis in context of the group as a whole. We have no clawback or contractual rights, so it would be just putting pressure on their good nature," said Sir Philip.
"It's only at a discussion stage at the moment, but the amount we might receive would be small, and there was a concern that it might be considered as just a PR stunt."
Both men were also questioned on why only John Hourican, the former chief of markets and international banking at RBS, was forced to resign, while his colleague Peter Nielsen, the group chief executive of markets, was allowed to keep his job.
After initially stumbling around, Sir Philip conceded that both men were responsible, but neither was directly culpable although Hourican was more directly involved.
When asked for his view on why the banking sector as a whole had failed society, Hester said he believed "an excessively selfish and self-centered culture had developed in the banking sector".
"During the period of extraordinary boom, hubris set into this industry and showed itself on physical dimensions – it got too big and had huge risk concentrations. Further, it had a cultural dimension. I describe that as an excessively selfish and self-centred culture.
"We're trying to thread across many different dimensions in which the banking industry failed and each one has its own narrow story, but that is a thread which you can thread across. Everyone is selfish, but the degree of self-servedness (sic) of the banking industry has got to the wrong place."
He also acknowledged his own bank, before he joined as chief executive, was "too big and complicated for its capacity to manage".
"I don't think it's impossible for there to be a big bank that can be well managed... but clearly in the case of RBS, exacerbated by ABN Amro acquisition, [it was] beyond the bank's capabilities."
When asked if he thought banks needed to undergo a structural reform – with the suggestion being that any investment activities are separates from the retail banks – Hester responded: "In short, no.
"It was a narrow element, the thread which is the trading culture, but it’s impossible to serve corporates without market trades.
"What's important is to put customer service first, and understanding that the financial health of an organisation is dependent on that – that's somewhere we need to take the banks to."