London is now the worst place in the world to do business

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The continuing storm over City bonuses is damaging Britain's reputation as a place to do business, a group of leading international bankers has warned.

Government ministers have been accused of trying to gain public favour this week by stripping former RBS chief Fred Goodwin of his knighthood and pressurising current RBS chief executive Stephen Hester to reject a £1 million bonus.

One senior executive at a Wall Street bank told The Times: 'London is now the worst major centre in the world to do banking.'

The anti-banking bandwagon is only set to worsen in the next few days with the bonus announcement of Bob Diamond, Barclays chief executive.

Directors of privately-owned banks are concerned public pressure will be put on them to reduce or reject annual bonuses in the light of Mr Hester's decision to waive a bonus this week.

Investment banker Nicola Horlick, a university friend of Mr Hester has warned against a 'witchhunt' towards bankers.

'You shouldn't underestimate the importance of financial services to the country,' she told The Times. 'Without it we would be in dire straits. Let's not kill the golden goose that saved the country.

She said it was short-sighted to demonise Mr Hester when he was trying to raise the share price so the public could get its money back.

Mr Hester, chief executive of the 82 per cent publicly-owned Royal Bank of Scotland was the subject of sustained calls from government ministers and Ed Miliband, the Labour leader, to relinquish a bonus at such a politically-sensitive time.

Source Dialymail.co.uk

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