Big Finance reverting to bad old ways: Paul Taylor

-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

By Paul Taylor

PARIS (Reuters) - They're at it again.

No sooner has the financial system begun to stabilize than Big Finance is reverting to its old ways -- aggressive hiring, remuneration on steroids, wriggling out of regulation or threatening to decamp to evade tougher supervision.

These are is not the rantings of some crypto-Marxist City-basher, but the considered view of one of Europe's most thoughtful financial regulators.

In testimony to the House of Commons on Tuesday, FSA chief Lord Adair Turner voiced concern that the industry was failing to learn the lessons from the "biggest financial crisis in the history of market capitalism." Regulatory exhaustion and the first green shoots of recovery could prompt "some drawing back from the degree of radicalism that we require," he said, raising the prospect of another such crisis in 10 or 15 years' time.

Turner cited investment banks' aggressive hiring of traders among his concerns. Others would add the return of bumper bonuses, the casting off of restraints on top executives' pay, and threats by banks and hedge funds to desert the City if the EU or the UK enact onerous new rules.

There are plenty of examples. Last week, 10 of the biggest U.S. banks repaid $68 billion in U.S. taxpayers' bailout funds in a race to extract themselves from government restrictions on pay for senior executives.

Citi (C.N: Quote, Profile, Research), prevented from repaying its $25 billion in TARP funds, is reported to be planning to raise employees' base salaries by as much as 50 percent this year to offset smaller bonuses.