The most revealing insight into Goldman Sachs' record quarterly revenues and profits was provided by finance director David Viniar. He said the performance was achieved by "basic blocking and tackling". In other words, Goldman didn't do anything special between March and June. Its bankers didn't score spectacular goals or touchdowns; they simply went about their business in "plain vanilla" areas.

The result was that the firm generated profits at the rate of $38m a day while also allocating $74m daily to the pot labelled "compensation and benefits". If the second half of this year is like the first, Goldman's staff can expect to receive roughly $700,000 a head on average in 2009, with its big beasts collecting much, much more.

How did this happen so soon after the banking crisis? We can allow Goldman one little boast. It clearly did a better job of managing risk than most of its competitors. It didn't blow itself up and it is now freer than others to throw its capital behind profitable opportunities, particularly in bonds, currencies and commodities.

But the rewards for the survivors now start to look more obscene than ever. The disappearance of Lehman Brothers and Bear Stearns, the retreat of Royal Bank of Scotland, and the chastened nature of the Swiss banks and Morgan Stanley has changed the market. Goldman and a handful of other firms now enjoy immense pricing power.

Spreads between bid and offer prices have widened; fees for underwriting and arranging rights issues have exploded; and easy money can be made by finding buyers for the vast sums of debt that governments must issue. Investment banking suddenly looks like one of the world's least competitive industries.

Don't worry, the winners argue, it's a temporary phenomenon that will reverse when the rest of the sector is back on its feet. We'll see, but the behaviour of the survivors suggests the opposite: they are hiring staff on salaries and guaranteed bonus packages that make sense only if the days of mega-profits have returned permanently.

Their assessment may not be perverse. Regulators are clearly determined to stamp on remuneration structures that encourage excessive risk-taking. But Goldman demonstrated that, in the current investment banking climate, you don't have to take big risks to earn big bucks. The bank's leverage ratio has halved since 2007.

The question for governments in the US, Europe and Japan is whether they are prepared to tolerate this state of affairs indefinitely. The point of rescuing the banks was to prevent economic catastrophe. That process clearly involves banks rebuilding their capital bases and generating profits once again. But once this stage is reached – and Goldman has got there faster than anybody else – it's time to ask whether exceptional profits deserve exceptional rates of taxation.

If we, the taxpayers, are obliged to underwrite the banking system, it is surely right to extract a fair price for that guarantee. That's how pricing power works, as Goldman would presumably understand.

BA needs Iberia

British Airways chairman Martin Broughton says the timing isn't right for a rights issue as "a number of key issues" have to be resolved. No kidding. A prospectus written today would have to include a mammoth section on risk factors.

BA doesn't yet know the size of the deficit in its pension fund. The accounting valuation suggests a widening of £1.2bn in the past year, but it's the actuarial assessment that matters and that is likely to be even grimmer when the figures arrive in the autumn. Nor is there any sign of improvement in the aviation market. BA is now contemplating ripping out flat-bed seats in some of its 747s, acknowledging that demand for business class travel will be lower permanently.

And, perhaps most importantly, the intended merger with Iberia still has not happened. This deal promises to deliver annual cost savings of £400m, meaning it is by far the most important of BA's "self-help" measures. Chipping away at payroll costs and delaying the delivery of new planes is fine, but there's nothing like a grand merger to achieve big savings.

Broughton says he is "frustrated at the slow progress" and hopes management changes at Iberia will provide "an impetus" to discussions. That's hardly a statement of confidence. It sounds as the Spanish are waiting to see the size of the pension deficit .

In the meantime, any new cash will have to be raised via convertible bonds. Air France and Lufthansa have already tapped this market, so BA shouldn't encounter any difficulties. But it would be a sticking plaster. BA needs Iberia soon.

nils.pratley@theguardian.com