I think this FT leader is very good. First it says that public money underwrites the bonuses banks are getting ready to hand out. That is a familiar point but one that deserves to be emphasised. Then it puts its finger on something mentioned less often. These huge bonus pools are diverting funds that could be used to build capital, which the industry as a whole urgently needs to do.

The problem is not limited to the bonuses on which political debate has unhelpfully focused. It is widely agreed that variable pay must be designed to discourage risks to the economy. But current plans for regulating pay will not limit the total amount bankers extract from profits, which could instead be added to capital.

In principle, other planned regulation - strong insolvency regimes and risk-sensitive capital requirements - can limit banks' profits from risks underwritten by others. But it will take years before these are credibly enforced.

Yes. At the present rate of progress, in fact, one wonders if they will ever be credibly enforced. In any event, regulation of the overall level of bankers' pay, not just its design with respect to risk-taking, is evidently going to be needed--something I never expected to say.

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