Lots of speculation this morning that the FSA is going to take a softer line on remuneration policy at BOFIs than originally planned, though nothing on the website yet. The FSA code is due this week so presumably this is a bit of expectations management by the regulator. The broad argument seems to be that the FSA can't risk taking a tough line elsewhere if other regulators don't as this could lead to 'talent' moving elsewhere.
I'm sympathetic to the FSA's argument, expressed by Hector Sants in the FT today, that remuneration policy was a relatively minor contributory factor in the crisis. But the argument about the risk of taking too tough a regulatory line damaging our competitiveness was one of those that got us into this mess in the first place, wasn't it?