Martin Wolf, a columnist and editor for the Financial Times, is calling for regulations regarding the remuneration of banking executives.

Basically, he sees the current pay structures of banking, with enormous bonuses for short term results, as being a major factor in the current banking/credit crisis.

Further, he sees banking as an industry with an amazing talent for, “privatising gains and socialising losses.”

He says, “My attitude to the banking industry is not a prejudice. It is a ‘postjudice’.”, or to be translated into more prosaic language, he learns from the mistakes he observes, and prior behavior colors his attitude towards the industry.

It is the nature of limited liability businesses to create conflicts of interest – between management and shareholders, between management and other employees, between the business and customers and between the business and regulators. Yet the conflicts of interest created by large financial institutions are far harder to manage than in any other industry.

That is so for three fundamental reasons: first, these are virtually the only businesses able to devastate entire economies; second, in no other industry is uncertainty so pervasive; and, finally, in no other industry is it as hard for outsiders to judge the quality of decision-making, at least in the short run. This industry is, in consequence, exceptional in the extent of both regulation and subsidisation. Yet this combination can hardly be deemed a success. The present crisis in the world’s most sophisticated financial system demonstrates that.

Basically, he is saying that these institutions are immature and short sighted in outlook, but they possess the ability to destroy the output of the most of the rest of society, and so they need aggressive regulation.

Word up.