GUEST COMMENT: I am really not sure that massive wealth destruction was what the FSA intended

Forgive me if the premise for this article is totally obvious to all, but I don't think it is.

When the FSA put their remuneration rules in place following the Turner Report, did they really

intend to subject City workers to the massive wealth destruction that has resulted from the downturn in the global economy? When the rules were framed, I was of the opinion that the intention was to rein in risk taking in systemically significant financial institutions, rather than acting as a "double-levered brake" on the [London] economy.

We all accept that 2011 isn't going to be a vintage year. But did the FSA really want 40%+ wiped off the value of city workers' holdings of restricted stock, due to bank shares collapsing? I doubt it.

I am of the view that "deferred cash or shares" as the Turner report put it, were only to be clawed back in the event that banks required future state intervention, or didn't mend their 'casino habitué mentality.' Personally, I don't recall the intention to penalize employee stockholders for the sins of the Eurozone periphery or the US being unable to balance its budget.

So, the ever-present law of unintended consequences dictates an unhappy triumvirate of events for 2011: lost jobs, zero (or much reduced) bonuses, but also a massive wealth effect as global economies go into reverse.

Now, you could make a very strong argument that the global economy is in a mess due to the previous risk taking culture of the banks; but if so, is this the right transmission mechanism in order to extract some recompense?

At a time when HMG and the Treasury are desperately trying to boost the domestic economy, does it make any sense to have the "double levered brake" of massively reduced compensation as well as the wealth drag of city employees' "forced" stock holdings collapsing? I doubt it.

I know people who have "lost" 500k-1.5m on the value of their holdings in restricted stock in the past nine months. There is no suggestion (that I can see) that the principals of the Code have been breached....yet they are still 40%+ poorer...

I am sure that the usual commentators will speculate that "losing" such amounts of money is a problem that many people can only dream of having. But when you consider the knock on effects to the wider economy of this lost spending power (with its multiplier effect), the simple fact is that it's not ideal.

Few people will be crying for the estate agents of the Royal Borough or for the Aston Martin salesmen, but if they consider what their taxes pay for, maybe they should.

The writer has worked in the City for 25+ years...and only takes cash...no credit.