The big profits made by the banks did not come through talent or hard work. They're just a free gift, says billionaire financier George Soros.

In an interview with the Financial Times, Soros says soaring executive pay needs to be regulated because the banks have been getting hidden subsidies by borrowing at close to zero rates and then buying 10 year government bonds for 3.5%. That's money for jam! "So those earnings are not the achievement of risk takers," Soros says. "These are gifts, hidden gifts, from the government, so I don’t think that those monies, for instance, should be used to pay bonuses. And so there’s a resentment which I think is justified."

In other words, US taxpayers have been funding the pay increases at the banks because the US Government is too weak and gutless to take them on.

While the banks claim that putting a cap on their pay would see them lose talent, summed up here by Douglas Elliot at the Brookings Institiution, Soros says that's probably not a bad thing. He says: "That would push the risk takers who are good at taking risks out of Goldman Sachs into hedge funds where they actually belong, because hedge funds take risks with their own capital, not with the deposits and not with the government guarantees".

Soros also says he is not confident that the Obama administration will be able to bring in regulation that will control the banks. And there's a good reason for that. The banks are now bigger than ever. "Because actually banks are very influential politically and now the remaining banks ... we’ve got three or four banks that dominate the banking scene in the United States. They have a quasi-oligopolistic position and they want to use that clout to protect that position. So you will have a big political struggle to get the right kind of regulation through."