As the bankers' bonus season arrives and the world's media ogle the figures, something seems to have gone missing in the debate. One of the recommendations urged by regulators on both sides of the Atlantic, backed up with the threat of further intervention if ignored, was to change the way in which bonuses are paid, rather than the size of them.

Ever since Credit Suisse broke new ground with its Partner Asset Facility, a growing number of investment banks have altered the terms and conditions for their staff. Deferred payments, share options with long lock-ups and claw-back clauses are becoming the norm, especially for the more risk-based roles on the trading desks.

So, is all this remunerative innovation having any effect on bankers' behaviour? It is still early days, but some anecdotal evidence is beginning to reach our ears that the answer may be affirmative. In particular, traders are apparently becoming more reluctant to take on illiquid exposures of any size, for fear that their pay packet will take a direct hit if the position proves difficult to unwind.

Challenge of supervision

A pat on the back for regulators? Not necessarily. As we have frequently noted, the real challenge of supervision is being able to distinguish between speculative position-taking by the banks themselves – the socially useless stuff, in the terminology of UK Financial Services Authority chairman Adair Turner – and trades driven by the needs of major clients such as pension funds or corporates.

Curbing traders' risk appetite across the board is not guaranteed to make that distinction. Indeed, pension fund managers and corporate treasurers are grumbling that pricing on anything but the plainest of vanilla derivatives is still eye-watering, even though the post-Lehman dislocation has abated. Some borrowers and institutional investors are apparently beginning to gamble a little with their risk management, rather than see short-term profits eroded by the high cost of hedging.

And this is definitely not what regulators intended – a transfer of risk-taking activity from banks to non-banks; especially at a time when inflation is spiking in many western European countries, prompting questions about when ultra-easy monetary policies will come to an end. One market participant warns that yield curves will "bolt" when the first rate hike arrives, which could leave central banks with some embarrassing consequences if their efforts to cut risks in the banking sector have, paradoxically, discouraged the banks' clients from protecting themselves against higher rates.

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