As the fall-out from the excesses of the past 10 years intensifies I make no apology for staying on the topic to pick up from where I left off last month. There is one huge question to which, as yet, our political leaders have no answer: if we are to change the culture in business, how can we ensure the lessons to be learned are learned by both the regulators and the regulated?
The most worrying aspect of the initial Paulsen rescue package for the US financial services industry was the complete lack of consequences for both regulators and those they regulate. Potentially the leaders of the rush to excess in both risk and reward could have walked away from the debris, shaken off the dust and thanked their stars for such a lucky escape. The revisions imposed by a reluctant congress were the bare minimum that needed to be agreed to ensure the poor taxpayer had any hope of repayment and of imposing any sense of accountability on the leaders of those institutions who would offload their worthless debt. I don't think the US went far enough to ensure the interests of Main St rather than Wall St.
Here too, with the Lloyds TSB/HBOS transaction and the Bradford and Bingley nationalisation, executives who led the rush to get their snouts in the trough - to quote an old trade union leader - have managed or will manage to walk away with enough compensation so they won't need to worry too much about their next job. It may require the sale of some of their houses, a reduction in the number of horses and fewer five-star holidays a year, but they'll manage.
On the other side: the regulators too have been unscathed; if anything their roles (and no doubt rewards) look like they are to be enhanced. This is equally concerning. Those in senior roles in the regulatory regime need to be held accountable for the failure of their organisations to protect the integrity of the system and the interests of consumers and investors.
On the structural side it's time to bring back mutual societies as a core feature of the savings and property loans system with a governance structure that prevents de-mutualisation - a movement that drove so much of the rush to greater risk.
Commercial banks should be required to have much stronger balance sheets and it should be a regulatory requirement that consumer banks do not borrow short and lend long, are subject to far more stringent credit controls and have their boards held tightly accountable for actions of senior execs.
Having said that, it is also clear the regulatory framework needs fewer rules, greater clarity of what is and is not legal and a shift from a culture of compliance to one of commitment to a more transparent system of reporting.
As for rewards and incentives it's time to bite the bullet: we need to realise the so-called war for talent has done little to ensure the best people get the top jobs and a great deal to increase the reward available for having little or no talent to run organisations in the interests of all rather than the few. So for those in organisations where the capital employed is not their own, I believe we need to impose the discipline their boards are clearly unable or unwilling to adopt.
Bonus plans should be capped to a maximum percentage of salary and there should be a clear statement by investors, government and industry generally to set a ratio between the lowest and highest paid earners in any organisation. Share ownership schemes should not allow release of capital for a substantial period after it has been realised - possibly up to five years, to drive longer term thinking. Contracts should allow for dismissal with no or very limited compensation under circumstances of business failure.
Don't like it? Then decide to take the very significant risks involved in trying to get rich: put your house up and raise your own capital. After all, all you have to risk is your own family rather than everyone else's.
