Gordon Brown and Alistair Darling have discovered that by taking shares in Britain's bust banks, they have opened something akin to a Pandora's Box.
The row over Fred "The Shred" Goodwin's (ex CEO of the Royal Bank of Scotland) £650K per annum pension, that his fellow directors generously awarded him for his "services" to the bank has ratcheted up a notch.
Despite pleas from Lord Myners to Sir Fred to give it up, Sir Fred is unmoved and has noted that Lord Myners was aware of the deal and authorised it. Lord Myners is having none of this, and counterclaimed that he was under the impression that it was a contractual obligation; implying that certain members of the board of RBS (when this matter was discussed) must have given him a misleading impression of the situation.
All of this comes against a background of public anger over the waste of money and destruction of value by certain "leading" banks, and the fact that the taxpayer now has to come riding to the rescue.
The public would be forgiven for thinking that as they now own a large slice of some of Britain's leading banks, they may have some say over "trifling" matters such as pension, and bonuses. Indeed, the recent harrumphing by Brown over "rewarding failure" would have stiffened the public's resolve to see "justice" done.
However, what the government daren't let on, but is becoming increasingly apparent from comments made by leading City figures (such as Mervyn King) is that they were complicit in allowing the banks to get away with too much during the "boom" years, by insisting on a light regulatory touch from the FSA and Bank of England.
Now that we have hit lean years the cry has gone up for nationalisation. This, whilst satisfying the public's and certain politicians' blood lust for revenge, will not resolve the problem. As Brown and Darling know, were one bank in the UK to be nationalised (ie 100% taken over) every other bank share in the UK would fall to zero as investors would rationalise that their bank was next. The result would be a complete collapse in the banking systems in this country.
That is why Brown and Darling talk tough, but carry a very small stick; they know that in effect the banks have them over a barrel.
In the meantime, whilst the arguments rage, the wheels are falling off the tripartite regulatory system created by Brown. He would be advised to come up with a new regulatory system soon, lest we face even worse problems in the future.