"The United States has been ransacked and pillaged. Our structures have been gutted and only the walls are left standing … In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain international propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime." Senator Louis McFadden in the US House of Representatives, June 1932

"Never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, with so little real reform." Mervyn King, governor of the Bank of England, speech to Edinburgh business leaders, October 2009.

THERE IS a missing link in the debate about bonuses: shareholders. They are the owners of the banks, so should have a significant say in remuneration, but, with some honourable exceptions such as Hermes and Co-operative Asset Management, they have kept quiet.

When shareholders or their representatives do speak – off the record, of course – it is not always encouraging. One conversation last week wound me up so much I couldn't sleep; a colleague suffered a similar bout of insomnia. We were told that a banker, sans bonus, could not live on £200,000 a year, when his outgoings were £350,000. How would he manage the school fees?

Just how talented can these bankers can be if they lack the basic financial management skills to live a good life on £200,000 a year, or to have saved something for lean times? Never mind private school fees, what about the strain they have put on taxpayers, who fund the state system which educates more than 90% of our children?

A sense of entitlement does not make them entitled. The bonuses being paid this year are not a reward for talent, but the product of taxpayer support, central bank rates so cheap they are almost free, and reduced competition.

We were told if you curb bonuses, the banks will head for the hills, damaging the City and the economy. We were told it's a very complicated issue, but that if we insist on cutting back bonuses we will pay a heavy price.

As if we're not already. I'm sure readers will forgive my simplicity in pointing out that 6m jobs have been lost in the US, two and a half million in the euro area and half a million in the UK. Support for the banking sector here is close to £1tn, and, as Mervyn King says, we will be paying for the impact on the public finances for a generation.

We were told co-ordinated international action on bonuses is unrealistic, because some countries would break ranks. That hasn't deterred Barack Obama's pay tsar from proposing drastic curbs on remuneration for the bosses of bailed-out companies, limiting rewards to $500,000 a year with a 50% cut in total compensation.

In any case, countries that did defy global standards would risk turning themselves into bonus-havens with all the disadvantages suffered by tax-havens: a magnetic attraction for the "dark pirates" and a relatively impoverished native population, dependant on the patronage of a rootless elite.

We were told last week by Lord Griffiths, vice-chairman of Goldman Sachs, that banks should not be ashamed of paying bonuses, that we have to accept inequality is a way of achieving greater prosperity for all – the trickle-down theory of wealth. I prefer novelist Margaret Atwood's trickle-down theory of debt; when the rich and powerful default, those lower down are crushed, unnoticed, in the wreckage.

Bonuses could be addressed if the banks collectively produced some best practice standards: it would be very impressive to see leadership on this from a strong international institution such as HSBC. They could be tackled if shareholders, instead of defending the indefensible, came together as a coalition of owners to put pressure on the banks and other companies, and did their job of serving pension fund members and endowment savers.

Even individuals, who alone have little power, can contact the trustees of pension funds, mutual funds, charities or educational trusts in which they have a stake and ask them to engage with the banks. Trustees have a fiduciary duty to protect their members, and arguably are in breach if they do not consider the future stability of the banking system.

My objection is not so much that someone at Goldman Sachs receives a large bonus if they get it right, but that when they get it wrong, we all pay. That is why King is right to call for the splitting of basic utility banking from the "casino" activities of investment banks, with only the utilities enjoying state protection if they go down.

We are told this is nonsense, that it would not have prevented the collapse of Northern Rock, a utility bank, or that of Lehman, an investment bank. But after the repeal of the Glass-Steagall Act in the US, which until 1999 imposed just such a separation, the culture of the casino permeated the utilities. The Rock was not a staid savings and loans operation; like an innocent in Vegas, it was playing roulette with the big boys. Investment banks were systemically important because they conducted their dealings in debt instruments with the utility banks, which should not have touched them with a ten-foot pole.

We are told we could not split the banks without international agreement: the same is true of climate change, but that doesn't stop us trying. Separation might be difficult, but as King says, it is not impossible, and if the casino bankers were excluded from state lifeboats their rewards need not trouble taxpayers so much. Preferably, casino banks would also be structured as partnerships, as Goldman Sachs was until relatively recently, so individuals would bear real personal risk.

We're told this is anti-capitalist, utopian, that we're helpless to resist the bank and the bonus. We should not believe everything we are told.