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Still, Mr. Feinberg said he had already "concluded that anybody making $100 million a year is engaged in excessive risk".
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The draft E.U. law is part of an international drive to rein in excessive risk-taking by the financial services sector in light of the global financial crisis.
The guiding principles should be to rein in excessive risk-taking and to remove distortions that bias one form of economic activity over another.
Mr. Feinberg's review also comes as almost every regulator in Washington has jumped on the bandwagon to rein in excessive risk-taking and pay.
But in essence he told investors not to expect lower rates just on that basis, because one of the goals of Fed policy is to rein in excessive risk-taking.
The view that "smart regulation" can rein in excessive risk-taking is completely implausible.
Long booms tended to result in excessive risk-taking and "Ponzi finance", where investors buy assets with borrowed money in the hope of quick capital gains.
The chief executive of Citigroup told a government panel on Thursday that no financial institution should be too big to fail and that he was aggressively moving to break up the bank and rein in excessive risk-taking.
The Obama administration has made bolstering oversight of derivatives a central part of its plan to reform the financial industry and rein in excessive risk-taking, and has called for requiring certain kinds of credit-default swaps to be traded through a central clearinghouse and possibly one or more exchanges.
In particular, if no countervailing actions are taken, what would be perceived as an implicit expansion of the safety net could exacerbate the problem of "too big to fail," possibly resulting in excessive risk-taking and yet greater systemic risk in the future.
Banks and their shareholders and creditors will operate with more discipline, knowing that they cannot engage in excessive risks and then collect taxpayer funded bailouts.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com