As you are undoubtedly aware, Adair Turner has ratcheted up the heat with an interview in Prospect Magazine in which he indicated a keenness to impose a Tobin tax on trading transactions if higher capital requirements fail to curb banks’ enthusiasm for paying generous bonuses.

Turner’s justification for such a tax is the fact that areas of banking (fixed-income securities, trading, derivatives and hedging, as well as possibly fund management and equities trading) have grown too big and are “socially useless.”

Not entirely surprisingly, the suggestion has elicited support from the likes of Frank Field, who told the The Guardian, “When the City has largely made money by moving money around and not by making anything, it is clear the pay is out of kilter.”

However, we spoke to one senior commodities trader who pointed out that he is contributing to the general good in his own particular way:

“Contrary to what seems to be current popular belief, we offer an important stabilizing function. If an oil producer were unable to hedge its production and unsure of future cash flows, they wouldn’t be able to source the financing required to develop new fields. In the absence of that financing, you’d have far less production and far higher prices. The same rationale can be applied to airlines, or holiday companies which need to stabilize their fuel costs – or to any manufacturer in the real economy. The real function that traders play is to stabilize prices for everyone else.”

“This isn’t on the table. If Adair Turner has views on tax policy, perhaps he should go and work in the Treasury.” (Financial Times)

I reckon he is to be applauded, for at least trying to think the unthinkable. (Financial Times)

ATTAC (Association for the Taxation of financial Transactions for the Aid of Citizens) (Attac)

Higher capital requirements are on the way. The question is how high they will go. (Wall Street Journal)

Three more bankers are suing Dresdner Kleinwort over bonuses. (Bloomberg)

Happy days at Calyon. (Reuters)

Midmarket M&A is nearly dead. (Financial News)

Guaranteed bonus quote of the day. (Reuters)

Buy yourself a fake reference. (Clusterstock)