The proposal sets the cap at about the right level. Retail banking is administered by people who earn less, mostly much less, than that. But no professional would join an investment bank unless he or she expected to earn far more. So the present dispute over pay and bonuses is more than a focus for populist anger about the cost of taxpayer bail-outs. Fundamental questions about the future structure of the financial services industry lie behind the controversy.

Some believe that conflicts of interest in financial conglomerates were at the heart of both the financial follies of the past decade: the new economy bubble of 1998-2000 and the credit expansion of 2003-2007. For such people it is essential to revisit the issues raised by Senators Glass and Steagall in the Great Depression.

Others claim that a basically sound structure of wholesale finance was upset by rogue mortgage brokers in America's inner cities and the public's love affair with housing and credit cards. Those who hold this view think it is important to keep top executives and traders in their posts. Only by doing so can failed banks be restored to their healthy state and weaned from dependence on the public purse.