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The flexing of shareholder muscle is keenly awaited, in the wake of the abuses of corporate power and bonus-driven idiocy that led to the Great Banking Burach.

They're being told they should share some of the responsibility for their failure to curtail or perhaps even to spot the excess and short-term incentives.

As with bank reform, there's a lot of waiting for others to make a move.

But now we've got a rippling of activity from one of Edinburgh's most muscular money men - at least measured by balance sheets.

It's one of two important developments for the sector in recent days, along with signs of success in a lobbying battle to keep the European Commission from over-regulation of the sector.

First, to Keith Skeoch. The boss of Standard Life Investments is a lot more than an Edinburgh fund manager.

He's chairman of the Association of British Insurers' investment committee, and chairman also of the Institutional Shareholders Committee - described as an umbrella group of umbrella groups, drawing together an awesome amount of investing clout.

He's responded to an invitation to Treasury minister Lord Myners to discuss the shareholder concerns the two men now share.

SLI was one of the biggest investors in Edinburgh's two big banks - that is, until one got sold to Lloyds and the other found itself with the government camped out on its front lawn in possession of an 84% stake.

Conflict of interest

Skeoch's letter, placed quietly on his company's website at the back end of last week, shared much of the government's view of bank executive pay and bonus reform, with one exception - the target set for Royal Bank's chief executive Stephen Hester is to reach a 70p share price within three years if he's to get two-thirds of his potential bonus pot of £9.6m (it's now trading below 38p).

Standard Life Investments doesn't agree that share price is a good target, arguing it's possible for RBS to hit the target share price for a given period but not in a way that's got long-term sustainability built into it.

That sounds like a conflict of interest between the government, wanting to bail out within five years or so, and an investor which wants to be into the RBS and elsewhere for many years after that.

More significant, perhaps, is the invitation from Keith Skeoch to Lord Myners to take on banks' vast fees for under-writing share offerings.

This has rumbled before. There is some talk of a consortium of the big insurers, including Aviva, the Pru and Standard Life, getting together to undercut the banks with their own under-writing vehicle at much lower prices, and the letter hints at that talk continuing.

'Fees fan the fire'

The thinking at SLI is that the fees paid to banks for under-writing are supposed to reflect the risk they carry of the offer being under-subscribed.

But in offerings where that risk is hugely reduced, as we've seen in the strange months we've just been through, that risk is hugely reduced while the fees stay stubbornly high.

"Such fees serve to fan the fire when bankers' pay comes into focus," Skeoch writes to Myners.

"We are examining ways to try to address this concern but I do not under-estimate the challenges to achieving meaningful progress.

"I urge you to give this matter further consideration since a joined-up approach is more likely to be successful than unilateral ones."

You might wonder why shareholders in banks such as RBS - the government and SLI - are complaining. After all, it's in their banks' interest to make exceptional profits in their investment bank divisions - or to avoid even more exceptionally large losses.

But the wider picture is that other companies, in which SLI also has major stakes, are wanting to raise finance and find the cost of financing can be awesome.

High hedge funds

To European regulation: Readers of the Ledger with a strong sense of recall will be aware that fund managers were very alarmed by the proposed directive from the European Commission, which was intended to teach the City of London a lesson by bringing its hedge funds under a bit more control.

It's argued that the catch-all nature of the proposal would have put a big new regulatory burden on Scotland's investment trusts.

But the latest to emerge from Brussels is that lobbying has secured changes to the draft directive as it makes its way through the legislative process.

There's a blocking minority, through the qualified majority voting system, which is against a proposal to stop European investors from using so-called Alternative Investment Fund Managers outside the EU.

It also looks like compromise will be required on the idea that AIFMs should park their assets with an EU bank or credit institution, which would in turn be responsible for losses.

More on 23 March, when the European Parliament debates the impact on investment trusts.

I'm told it's heavy-going for Brits trying to roll together coalitions of national votes.

In the eyes of their 25 European partners, neither the UK nor Ireland has much liquid political capital in Brussels when it comes to financial regulation.