Afternoon:
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When the details of Stephen Hester's bonus scheme were disclosed a month ago, there were guffaws in the City.
They weren't laughing at the impossibility of the brief, but at the ludicrously low level at which the trigger share price of 70p was set.
Yes, the shares had been 10p, but they were already climbing. "All Hester has to do," said one banker, laughing, "is do nothing. If he sits back and takes the phone off the hook, takes no calls and sees no one, the shares will reach 70p."
Late in the day, it is claimed in Whitehall, ministers woke up to the easily attainable conditions - hence the surprise departure of John Kingman as chief executive of UKFI, the body which looks after the Government's 70 per cent stake in the bank (officially, Mr Kingman wants to head to the private sector).
The fact is, for most of its recent past RBS was well-run with some terrific brands, such as NatWest. But for its extremely rapid expansion in the last few years, culminating in the disastrously timed purchase of ABN Amro, RBS might now be basking in the freedom of being outside the taxpayers' emergency rescue, same as HSBC and Barclays.
Mr Hester's task is to undo that aggressive growth, which saw the Edinburgh bank soar to become one of the biggest financial institutions in the world. Those glory days have gone. What will emerge is a drastically pared down operation (so far this year he has reduced the size of RBS by 26 per cent or £574billion, selling some businesses and cutting thousands of jobs), spread across far fewer countries, with a massively diminished workforce and engaged in fewer areas of business. There's no question the job he faces is enormous - it can't happen overnight.
However, the signs are positive. RBS may have posted the largest corporate loss in UK history of £24.1billion, but there is no evidence today of that being repeated. Far from it. Mr Hester appears to have set the bank on a determinedly resolute course.
The targets he has laid down may look bold, but in truth they only amount to a restoration of sound, conservative banking practice. It's a measure of how far from that path the bank had strayed under its previous management that they appear so ambitious.
As Mr Hester is right to emphasise, the core of RBS remains strong. By nature he's a cautious person, so when he says "We are now confident we can rebuild RBS", he should be believed. Barring unforseen disaster, the Government will get its money back - and he will receive his bonus.
