Erikka Askeland: Playing cat and mouse with banking bonus culture

As we saw last week in Ireland -when Brian Lenihan told the Allied Irish Bank where it could shove its 34m bonus pot - the biggest impact always tends to be on the middle income and lower salary earners whose contracts have as standard a target-led bonus scheme. Meanwhile the superbankers seem to maintain their cut on massive corporate transactions.

But what will really pummel down formerly booming levels of bankers' pay is not an indignant Vince Cable or the Financial Services Authority (FSA), which seems to have watered down its pay rules, but bureaucrats in Switzerland.

Last week, the Basel Committee on Banking Supervision, the international banking watchdog, set out yet another report on how much money the banks have and again hoiked up the level of capital they will need to hold by 2019.

As a result, the banks have to stuff their mattresses with more core tier 1 capital and they will have less to pay out in dividends to investors and - beware the fat cats - employees.

According to the Bank of England's financial stability report released? yesterday, the UK banks have thicker mattresses than their counterparts in Europe. But while this is welcome, it isn't to say they can now just lie back and think of England.

Signs of the banks' recovering health are decidedly mixed. Home owners aren't defaulting on their mortgages - at least not to the extent they were in the 1990s. Corporate lending defaults are still below expectation, but there is distinct risk there will be a rash of them as some sectors pick up but the firms themselves grind to a halt as they fail to find sufficient capital to grease the wheels of industry. Much of this will be due to the banks' inability to lend. This is the downside to not being able to pay big bonuses - nor can the banks afford to be lavishing loans on corporates.

Then there is the whole crashing debacle of European sovereigns weighing down the central bank. UK banks aren't big lenders to the wobbly sovereigns Greece, Portugal and Spain but they are deep in hock to Germany and France, who are in turn desperately trying to keep the eurozone intact solely by dint of the continuing patience of their tax payers.

All this pressure suggests all banks face a long hard slog for as long as the next ten years. Nor will they be operating in the sort of environment that lends itself to throwing big bucks at its employees.Soames can throw a good deal of light on energy

AGGREKO didn't finish its year with a bang but neither did it end up whimpering. An upbeat pre-Christmas update for the temporary power generator firm said sales in the last quarter of the year were all healthy, wealthy and wise with a 25 per cent increase in profit for 2010.

But there will be no fun and games for Aggreko in 2011 - literally. This year the firm had a number of big, juicy feel good projects that everyone loves and that the firm excels at doing - the Fifa World Cup, the Winter Olympics and the Asian Games. These brought in 90m of revenues for Aggreko in 2010, but there's not as much on that scale in the austere debt-and-recession racked world coming up in 2011 for Aggreko to fight for.

But this is not really a problem for Aggreko, because global turmoil is actually good for its business. The firm's International Power Projects division - the part of the business where entire governments rely on Aggreko generators to power cities and its infrastructure - is set for a good year.

Unlike the patchy or perhaps non-existent power plants in third world or war-torn countries, Aggreko's gas powered generators are reliable albeit very expensive.

This is why Rupert Soames, chief executive of Aggreko, should be heeded when he warns about the risk of the lights going out in the UK.

He's seen what happens when power infrastructure fails and he puts the lights back on for a handsome price.