So just what do you have to do to get fired around here? At Royal Bank of Scotland, gross moral turpitude and some energetic expense fiddling might just do it. Apparently, the worst loss in British banking history may not.

Sir Tom McKillop will stand up as chairman of RBS today to announce a loss of as much as £1.7 billion. He will, we can assume, attempt to justify last summer's €10 billion purchase of ABN Amro. Bad timing, couldn't see it coming, huge opportunities still, you can probably write the script.

RBS is a curious beast. Until the purchase of NatWest in 2000, its word went unchallenged in the incestuous Scottish establishment. You can bet that if anyone on an Edinburgh newspaper wrote in the above terms, the matter would be raised on the golf course with the writer's editor and his or her career would take an abrupt detour.

When RBS bought NatWest and raised its exposure south of the border, it ran into the sort of brickbats and occasional abuse that is the lot of the average FTSE 100 company. The bank and its minders reacted, I can personally attest, with extreme sensitivity. Any criticism of its palatial new HQ in Gogarburn seems to raise particular paranoia.

Now RBS stands accused of frittering away billions of shareholders' funds on the usual rubbish loans. A third of the £5.9 billion writedowns already announced came from the ABN Amro book. McKillop failed to restrain the gung-ho Sir Fred “The Shred” Goodwin because he had no experience in banking and, frankly, only got the job because it had to go to a Scottish grandee, of whom there was a limited supply. Various institutions now want his head.

What can be said in RBS's defence? Well, in the same way that it is hard to blame someone who bought a house last July for not waiting until now, there was no credit crunch when they signed the deal. But it was pretty obvious, even last summer, that buying banking assets at that stage in the cycle was a high-risk strategy.

It has been argued that it is a bit rich for them to come after the board now, given that 95 per cent of shareholders approved the deal. Nonsense; they approved it because they were advised to by said board.

Actions have consequences. It cannot be said too often that, apart from Northern Rock, a unique situation, not a single UK banker has willingly taken the drop.

Even Steven Crawshaw at Bradford & Bingley went because of ill health. It is the institutions' job, if UK banking plc lacks any sense of shame, to take the necessary action.

In an ideal world, McKillop should stand up today and announce his resignation. Goodwin should say that, while shareholders have asked him to remain for a couple of years to oversee the integration of ABN Amro, a job he is clearly suited to, he will also be off thereafter. And no huge payoffs.

Don't hold your breath.

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats