A malus for every bonus
As you'd expect, the prime minister tried to take credit in his Observer article yesterday for abolishing what he called the "old short-term bonus culture" (he swanked that "we are changing the bonus system").
But bankers who've been in the game for a while - a bit longer than the vaunted era when "boom and bust" had supposedly been abolished - tell me he could have gone much further in his reform of bonus payments at Royal Bank of Scotland.
It's true that the new approach at RBS should reduce the risk that its bankers will receive bonuses for deals that turn out to be stinky - because payments will be deferred till it's clear whether those deals have really benefited the bank.
But even this amended bonus system still represents a one-way bet for bankers, a wager they can't lose.
In keeping with the norm of the past decade or so, RBS traders and advisers will continue to be rewarded if they make a profit when investing other people's money, the balance sheet owned by Royal Bank's shareholders, not their own capital.
So what's the worst that could happen to them if they didn't make a profit or even if their deals generated losses?
Short of losing their jobs, they simply wouldn't get the bonus.
Unlike proper entrepreneurial risk-taking, of the sort routinely practised by RBS's clients, there's no risk to the bankers' personal wealth: they wouldn't be poorer when the bank made a loss, they just wouldn't be any richer.
A genuine reform of the bonus-culture, one that would really put the kibosh on bankers taking foolish risks, would re-introduce the concept of the "malus" - or the idea that when a firm does badly, or a deal goes bad, the partners (in this case the de-facto partners, the top executives) take a hit and suffer a permanent diminution of wealth.
Much of what went wrong with the banking system in the past few years was that all the bonus accrued to salaried bankers, while the malus fell on shareholders.
It was rational for bankers to up the ante in the global speculative game, because they scooped the lot if they won, but any losses fell on the banks' owners.
In fact the losses at some banks turned out to be too big even for shareholders, which is why we as taxpayers have had to prop up so many banks across the world.
So guess who currently faces the malus?
Yes, since we own all or much of our biggest banks, the prospect of the malus is with taxpayers - and only the bonus (albeit deferred and subject to longer-term performance criteria) goes to the bankers.
This doesn't sound quite fair, does it?
Surely the prime minister could have transferred some or all of the malus back to the bankers themselves?