"Banks have come to realise in the recent crisis that they are paying the price for having designed compensation packages which provide incentives that are not, in the long run, in the interests of the banks themselves, and I would like to think that would change," King said.
Last week the director-general of the CBI, Richard Lambert, said the bonus culture in the City and Wall Street had been responsible for much of the excessive risk-taking that led to the collapse of the US mortgage and housing markets.
King said yesterday, however, that the hubris of which the City had been guilty had now disappeared, as banks were having to raise capital from their shareholders and cut jobs to repair their balance sheets. "I don't think there is much hubris around today. I hope we do not return to this hubris ... it is important that people learn the lessons from this crisis."
I'm sure the banks are learning a good hard lesson as we throw more bailout cash at them without strings. They must be all a quiver with fear. The bankers are no doubt selling their third and fourth houses on Craigslist, right there with their with their yachts and Bentley.
