It seems to me the problem is that bankers have gotten very good at passing risk onto other parties. And other parties have been behaving in incredibly stupid ways. You can't fix stupid, so how do you prevent banks from separating risk from return?

And if bankers are not providing adequate returns, should this not be the responsibly of their shareholders to fix?

But boards have failed their shareholders. You can't fix stupid, again.

Those are the systemic problems in banking - separation of risk from reward and corrupt corporate leadership. Any regulation should be aimed at fixing those problems. I don't see where compensation structure comes into it at all. It's a symptom, not a cause. If people can make huge amounts of money, they will. That money has to go somewhere. And good on the bankers for making it- so long as they don't ruin it for the rest of us. Making sure they don't ruin it for the rest of us is the thing the government needs to concentrate on.

But the government is dumber than the bankers. You can't fix stupid- part three.

Maybe it's hopeless.