Leading article: Called to account (at last)

The Bank of England Governor, Sir Mervyn King, has not enjoyed many accolades recently, what with the Bank's uncertain handling of the Northern Rock crisis and its subsequent efforts to end paralysis in the mortgage market.

Yesterday, though, he was right on the money when he called for an end to what he called the "unattractive" City practice of offering huge bonuses to often inexperienced staff, so encouraging them to take huge risks.

His analysis was spot-on, too. Appearing before the Treasury Select Committee, he said the global credit crisis should make the banks understand they are "paying the price for having designed compensation packages which provide incentives that are not,in the long run in, the interest of the banks themselves". Indeed. He also drew a refreshing contrast between the big boys of the City, and their bonuses, and those who – far less conspicuously and far less well rewarded – run small businesses across the country. It was unfortunate, he reflected, that City money drained so much youthful talent. Right again, Sir Mervyn. The City may be the fount of London's prosperity but small firms make the rest of the economy go round. They succeed, not because of funny City money, but because they are soundly managed.

We do, though, have one quibble. It is not just the banks that are paying the price of the bonus culture. Even from his elevated perch, he should know that all the rest of us, including those small businesses, have no choice but to share the misery. If only he had made his point about bonuses rather louder and rather earlier, we might not be in quite the mess we are in.