This is the editorial in Herald Tribune. The opening is a clear statement that excessive pays for bankers, and huge rewards for risk-taking, brought financial disaster to US and the world. In US, the government recognised the issue but did far too little. Europe in contrast approved new rules bankers will receive only 20 to 30 percent bonus in cash. Balance is defer for 3 to 5 years. The bonus must be paid in shares or "contingent capital" - bonds that convert into equity if the bank is in trouble.
It is good that Europe puts in the measure to restrict excesses that brought the financial systems to its knees. The grossly obscene pay and bonuses are once paid are real money. "Profits" booked by the banks that were used to calculate bonuses may become huge losses for the banks in a few years. This will bring sanity and curb undesirable behaviour.
US must follow suit!
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