RBS

The head of the FSA, Hector Sants, says politicians must take responsibility for setting pay caps if they deem them "morally" necessary, and that not only bankers should be subject to such restrictions, reports the Telegraph.

The FTSE 100 rolled back some of yesterday's gains this morning, with Standard Chartered among the early casualties after announcing surprise plans to issue £1bn in new shares.

The government body at the heart of efforts to prop up Britain's banks is facing fresh upheaval with the appointment of a new chairman and the departure of its chief executive, writes the Daily Mail.

Barclays and Royal Bank of Scotland will have to find billions of pounds more capital if they are to continue growing their investment banks under new rules designed to protect against the higher risks of "casino" banking, says The Telegraph.

Fred Goodwin, the former head of the Royal Bank of Scotland, wined and dined at Chequers with Gordon Brown in the same year that he was presiding over the biggest losses in British corporate history, The Independent reports.

Northern Rock is expected to heap further embarrassment on the Government next month when it reports losses for the half in excess of £500m, putting it in breach of even specially relaxed regulatory rules, according to The Telegraph.

Royal Bank of Scotland, now 70%-owned by the government, lost more money last year than any other bank in the world, new figures out today confirm.

Former RBS chief executive Sir Fred Goodwin has offered to give up some of his controversial £700,000 a year pension.

The UK Government is talking to investors about the possible sale of its stakes in some of the country's largest banks.

The City watchdog has banned a record number of firms that sell mortgages, pensions, investments and insurance.