James Daley: Why such hysteria over bankers' pay?

The row over executive pay and pensions has started to become increasingly hysterical over the past few weeks, as the media and politicians have begun baying for blood in the wake of the banking crisis.

There's no doubt in my mind that there is an urgent need to change the regulations in this area. The banks' remuneration structures encouraged traders and managers to take on too much risk – handing out millions to some of those who were at the heart of the problems that caused the banking collapse.

But redrawing the regulations does not have to come hand in hand with a witch hunt for the executives who profited. It's too late to rectify these mistakes, and it's simplistic to try to pin the blame for the crisis on a handful of high-profile individuals.

The causes of the banking crisis are manifold, and while chief executives such as Sir Fred Goodwin (the former boss of Royal Bank of Scotland, below) have to bear some of the blame – it's important to remember that these executives were not wilfully trying to bring the global banking system to its knees.

These are not fraudsters or criminals. They're highly paid professionals who got it badly wrong, and have already lost millions of pounds.

Bankers are undoubtedly paid too much. They don't save lives or help shape our society – they're simply engaged in the business of making money out of money. Not a particularly worthy game.

But we can't simply turn round and blame a handful of the highest-profile individuals for this crisis – stripping them of their accrued pay and pensions – just because we're angry. We need to turn our attention to ensuring that this doesn't happen again.

Many of the people who were integral to designing the products and practices that led to the banking collapse, are already retired with millions of dollars in the bank. The likes of Sir Fred or Andy Hornby, the former HBOS chief executive, were simply the ones holding the parcel when the music stopped.

Fred Goodwin's pension of £650,000 a year may sound ridiculous – but it's no more than many banking executives are already receiving, and no more than some others will receive in the future. Shareholders in his company signed off the contributions to his pension year in, year out – and the regulators signed off his company's procedures and practices.

Let's be clear, just because these banks are now owned by the Government, it doesn't mean it is the taxpayer that will be picking up the bill for Sir Fred or Andy Hornby's pensions. These final-salary schemes were – unlike most government pension schemes – fully funded, which means that the money is ready and waiting.

I sincerely hope that we can find a way of making bankers' pay more proportionate. Nevertheless, we as a society have tacitly endorsed high executive pay for years – let's not now turn into an undignified, resentful angry mob, indiscriminately picking off the bankers who were in charge when the house of cards came crashing down.

Britain's banks got yet another kicking this week when the Court of Appeal rejected their attempts to justify their punitive overdraft charges. The case will now go to the House of Lords – but let's hope a final resolution can be reached sooner rather than later. There are still hundreds of people with outstanding claims for unfair bank charges – and none of these will be paid until the court case is finally closed.