Hector Sants said that the bonuses paid to bankers are too often linked to short term goals, such as selling on risky loans, rather than focusing on longer-term performance. The result is that large bonuses are paid before losses come to light.

The BBC's business editor, Robert Peston, described Sants' comments as "a sound ticking off for the City".

In his blog, Peston likened the pratices to a game in a casino - presumably played in a small or large casino rather than a regional one:

"In crude terms, they had been given the banks' capital to gamble in a game of global roulette. Before the wheel stopped turning, they were rewarded as though their bet on red had come good. But when the ball finally kerplunked in a black slot, well they and the moolah were long gone."

But while Sants stopped short of saying that the FSA should regulate bankers pay, the governor of the US Federal Reserve has said he believes there should be industry-wide guidelines for compensation, according to FT.com.