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9 January 2011
Last updated at 05:28 ET
Prime minister David Cameron has called on banks to pay smaller bonuses this year.
Speaking on the BBC's Andrew Marr show he said banks should be more "socially responsible".
He defended his government's action on banks, saying that, on the issue of banks and bonuses, his was one the first governments in the world to introduce a banking levy.
But he also said that "micro-managing" the banks was not the answer.
Mr Cameron warned against "banker-bashing", saying that it was too easy to make banks the "scapegoats" for the recession.
He said that the Royal Bank of Scotland (RBS), which is majority-owned by the taxpayer, should not be "leading the way" on bonuses but should be a "back marker".
There have been unconfirmed reports that the bank's chief executive, Stephen Hester, is to get a substantial bonus for his work in 2010.
The Sunday Telegraph reports that RBS's board is poised to award Mr Hester a cash-and-shares bonus of £2.5m at their meeting next month.
But Mr Cameron said the details of Mr Hester's pay packet was "pure speculation".
Howwver he warned RBS should not be paying out large bonuses.
"They should not be leading the way on bonuses, they should be a back-marker," he said.
Mr Cameron also said the banks needed to do more to increase their lending.
He said: What I want to see is socially responsible banks behaving responsibly, and proper agreements on lending to businesses, large and small."
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Speaking on the BBC's Andrew Marr show he said banks should be more "socially responsible".
He defended his government's action on banks, saying that, on the issue of banks and bonuses, his was one the first governments in the world to introduce a banking levy.
But he also said that "micro-managing" the banks was not the answer.
Mr Cameron warned against "banker-bashing", saying that it was too easy to make banks the "scapegoats" for the recession.
He said that the Royal Bank of Scotland (RBS), which is majority-owned by the taxpayer, should not be "leading the way" on bonuses but should be a "back marker".
There have been unconfirmed reports that the bank's chief executive, Stephen Hester, is to get a substantial bonus for his work in 2010.
The Sunday Telegraph reports that RBS's board is poised to award Mr Hester a cash-and-shares bonus of £2.5m at their meeting next month.
But Mr Cameron said the details of Mr Hester's pay packet was "pure speculation".
Howwver he warned RBS should not be paying out large bonuses.
"They should not be leading the way on bonuses, they should be a back-marker," he said.
Mr Cameron also said the banks needed to do more to increase their lending.
He said: What I want to see is socially responsible banks behaving responsibly, and proper agreements on lending to businesses, large and small."
Online Business Consulting | Internet Business Consulting