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Deloitte, which has 23 offices across the UK including Newcastle, is among the country's leading professional services firms » 
ClimateNE & Climate Change Schools Project support the move to a low-carbon, resilient economy and help businesses avoid risk and realise commercial opportunities. Posts by Jen Atkinson, Krista McKinzey and Harriet Thew » THE old chestnut of fat cat pay rolled into the limelight again last week, when some of the country's disgraced banking chiefs were called on to explain horrendous decisions that helped bring the UK financial system to its knees.
Politicians have called on Sir Fred 'the Shred' Goodwin - the former Royal Bank of Scotland chief executive who built a reputation as a fearsome cost-cutter - to pay back the ã2.8m bonus he received in 2007 after his ambitious acquisition spree led to the bank's near collapse and eventual part-nationalisation.
Although RBS has subsequently scrapped bonus pay-outs at board level as part of its Government bail-out conditions, it is allowed to make payments below board level - a move which has been widely condemned by politicians and public alike.
In the North-east, there was a similar outcry over Northern Rock's decision to pay staff bonuses of 10% when only taxpayers' money had saved it from extinction.
But despite heavy criticism from morality-seekers, a blanket ban on bonuses would be a costly mistake.
Firstly, talented financiers could flee for more lucrative shores that still dangle the carrot of performance-related incentives - putting London's status as a leading financial centre under threat.
Secondly, why should bankers - whose job it is to take calculated risks - not be rewarded if these decisions rake in extra revenue?
Curbing bonuses and sensible risk-taking could slow the recapitalisation of hobbled banks and the UK financial system's recovery. The other problem is that many managers already have bonus options written into their contracts. Unions would have a field day if these were ripped up and declared void.
The Treasury's probe into UK banking should insist on a greater degree of transparency - particularly on balance sheet disclosures - to prevent a repetition of previous wild excesses.
It should also insist that bonuses are purely performance-driven - so if banks do not make money, neither do their employees. Deferred share options could be the best way of rewarding staff while keeping control of cashflow.
Given what has gone on before, an independent review of UK banking is absolutely necessary.
But to penalise the next generation for the recklessness of a few makes no political or economic sense.
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