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We talk to the man trying to get the City of London back in order. How do you juggle popular outrage at what happened to banks and bonuses with the need not to overdo new regulation?

Governments in the big financial countries are caught in a bind as they contemplate what to do about the great turmoil.

On the one hand, there does seem to be a genuine outrage among ordinary people about things like pensions and bonuses in banks that are being propped up by tax-payers.

On the other, they know that politically-pleasing but unnecessary new laws might hamper the industry in future, particularly when finance can move out as easily as switching off the computers.

In Britain, for example, feeling was fired up by the revelation that Fred Goodwin, the chief executive of the once-mighty Royal Bank of Scotland would get a pension of $200,000 a year from the very bank he had led into disaster.

More broadly, in the general furore, the British government also commissioned a report, the Walker report into bank pay.

The government minister treading through this minefield is Lord Myners, formerly Paul Myners. He told our Business Editor Robert Peston of his humble background in the far west of England.

In the current environment, it turns out that everybody is watching their own backs. The lawyer lurks at times like these, sharp-eyed for a succulent bit of litigation.

It transpires, for example, that directors of companies are increasingly taking out insurance against their own share-holders. Why? Mike Lea, the head of the executive liability department at insurance company Jardine Lloyd Thompson explained.

It is obvious that those who lose their jobs in a recession face real emotional problems. Apart from the sheer loss of income, there's all the attendant doubting of self-worth.

But what about people who keep their jobs in recessions? Do we adjust to straitened times - feel bad at first and then get used to it?

Our regular commentator, Lucy Kellaway of the Financial Times, has put all of us on the psychiatrists' couch.

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