Further limit on banks' flexibility to work out suitable salary packages with their most senior staff could form one element of the package of banking reforms the Treasurer, Wayne Swan, plans to outline next month. Swan, in a media interview yesterday, said that the financial regulator was working with banks to restructure executive pay. The government is also looking at giving shareholders more say over excessive salaries, Swan said. It is only six months or so since new rules on executive pay, devised by the Australian Prudential Regulation Authority, came into force as a prudential standard, and which banks must apply in full by 2013. The general tenor of these standards is to require boards to engage more actively in pay arrangements for senior staff, and to establish a board remuneration committee, as well as a remuneration policy (not that there would be many banks lacking the latter). For his part, the shadow treasurer, Joe Hockey, continued to insist on the substance of his intervention in the banking debate three weeks ago, and in rebuttal to the latest contribution yesterday from the Australian Bankers Association. ABA chief executive Steven Münchenberg said, in a media release yesterday: "Hockey's claims are based on an assertion that taxpayers' money is at risk, therefore governments should have greater control over banks. But taxpayers' money is not at risk. "Under the deposit guarantee, in the unlikely event that one of Australia's heavily regulated, closely supervised banks, credit unions or building societies collapses, no depositor or taxpayer will be left out of pocket, because the rest of the industry will be levied to cover any shortfall. "Far from being underwritten by taxpayers, it is the industry itself that underwrites the deposit guarantee.  A shadow treasurer should be aware of that simple fact." "As for the wholesale guarantee, Australia's highly rated AA banks pay the government, on average, A$100 million a month for that guarantee. So far, the government has earned A$2 billion from the banks for the use of that guarantee, on top of the A$8 billion in tax paid by banks last year." Joe Hockey, in response, told the media yesterday: "I know a guarantee when I see it. The moral hazard is effectively a tax-payer guarantee." "If they want to argue the terms of the guarantee they can do what they want. They're being tricksters. "The more the ABA and others choose to have a pot-shot at me, the more determined I am to get reform underway. So I'd say to them, keep going."