By Max Clarke

Looking ahead to the bonus round, Tony Manwaring CEO of leading independent international think tank Tomorrow's Company called upon City leaders to recognise the importance of establishing a renewed 'licence to operate'

Manwaring said, "The bonus round exposes a deep and raw nerve in British society. The public cannot understand how or why such payments are justified, especially at a time when so many are facing job losses and deep insecurity, whilst the Government has had to come to terms with the reality of bonuses being awarded despite election pledges to the contrary.

City leaders may well feel more than justified in making such awards, given improved performance - the City accounts for 14% of national output (greater than manufacturing) and an estimated £53bn to UK government taxes in the 2009/10 financial year, accounting for 11% of the total UK tax take. But with feelings running so high, these arguments won't change hearts and win minds, which is what now has to be done.

Private discussions with City leaders underline the risk to the future success of the City operating globally from the very real threat of major banks relocating or developing new business elsewhere, and loosing top talent. The need for a truely global agreement to establish a level playing field on pay is acknowledged but has not yet been secured. We cannot wish away this competitive reality.

Now is the time for City leaders to step up and make sense of the bonus round. They need to state the case for banking in general, and the logic for these pay awards in particular. They need to outline a routemap which points the way to future success over the long-term, and the contribution of decisions on pay now to help achieve that success.

Banks and financial institutions need to demonstrate their sense of responsibility to the economy and the society of which they are part - not only through lending to small businesses, but also by practically demonstrating their contribution to our future prosperity.

Above all, we need to believe that - once again - we can trust our banks. City leaders need to detail the lessons that they have learnt and to outline how their leadership of our banks is changing cultures, embedding strong values, and building organisations that will deliver success for the long-term, effectively managing risk in their retail and investment operations, whilst re-capitalising the banks to protect against future shocks.

In so doing, banks and other financial institutions must show that they can exercise effective stewardship of our money, our savings and our assets"

Topics