Sept. 15 (Bloomberg) -- Plenty of people criticize bankers over the amount of money they earn. Now they are getting flak from within their own ranks.

Two of the world’s most senior bankers are supporting curbs on the industry’s remuneration system. Deutsche Bank AG Chief Executive Officer Josef Ackermann has called for global rules to regulate pay. And Goldman Sachs Group Inc. CEO Lloyd Blankfein proposes a ban on multiyear guaranteed bonuses, and wants the “clawback” of past bonuses to be permitted.

Admittedly, you don’t expect much fraternity on a trading floor. Even so, if there is anyone you might expect to be defending a free market in what bankers get paid, it would be the men running Deutsche Bank and Goldman Sachs.

So what gives? While it is possible that Ackermann and Blankfein have suddenly renounced greed and materialism, there is another more plausible explanation.

They are talking their own book. Any controls on the financial industry will only make the existing big firms more profitable, and make it harder for new competitors to emerge. The people with most to gain wouldn’t be the general public. It would be banking CEOs such as Ackermann and Blankfein.

If Deutsche Bank and Goldman Sachs are now in favor of curbing pay, maybe it’s not such a good idea after all.

‘War for Talent’

At a banking conference in Frankfurt last week, Ackermann argued the case for standardized global rules on pay to make sure there was an even playing field in the “war for talent.”

Blankfein said at the same conference there should be a clawback of pay to discourage excessive risk-taking. More of their remuneration should be in stock, and senior executives should be required to keep most of it until they retire.

“Compensation continues to generate controversy and anger,” he said. “And, in many respects, much of it is understandable and appropriate.”

Well, that certainly wasn’t what we expected to hear. At this rate, Bill Gates will soon be arguing in favor of free, open-source software. And George Soros will be lecturing us on the need for exchange controls to stop hedge funds speculating in currencies.

This isn’t a sudden outbreak of social conscience among the world’s most powerful bankers. It is a cynical attempt to entrench the power of existing banks.

Piece of the Action

Ackermann says we need global rules on pay, otherwise one country would lose out to another. It isn’t hard to see why he is concerned. If Germany introduces controls on remuneration, and the U.K. doesn’t, that will probably end up hurting his Frankfurt-based bank, and helping the British ones. Even worse, banks from offshore centers, without any restrictions on pay, might be able to grab a piece of the action. Ackermann’s global rules would favor the big banks over the small ones.

Likewise, Blankfein wants to have rules controlling the way bankers get paid, requiring more of the rewards to be allocated in stock. And, in fairness, there is much sense in that. Yet it makes a big difference who you are. Most of us would be happy to receive a big parcel marked “Shares in Goldman Sachs.” We wouldn’t be so happy to receive one marked “Shares in a Small Unknown Bank That Has Some Good Ideas for Eating Goldman’s Lunch.” Most people would prefer to have some cash instead. Again, it favors the existing big firms over new competitors.

A global set of rules for banker pay would do three things.

Transfer of Power

It would create an effective cartel among the main, established investment banks. They wouldn’t have to worry about their best staff being poached by a rival bank offering a better deal to the star traders. That would be banned. It would, at a stroke, transfer power from the staff to the managers.

It would entrench the established players. The only way for a new competitor to make any headway in the market is by attracting experienced staff and paying them better. They would lose money in the short term, but hope to make up for it later on, the way any new player in an industry does. But pay rules and stricter regulation would make that impossible. It would lock in the position of the firms that dominate investment banking -- companies such as Goldman Sachs and Deutsche Bank.

It would also mean self-regulation rather than external supervision. And like any self-regulatory system, the first job would be to make life easier for existing players. If regulation of pay is inevitable, it makes sense to take control of it.

Ackermann and Blankfein are proposing ways to rig the market so that it benefits them. That’s smart. We can see how they rose to the top of the banking industry.

We shouldn’t fall for it. If it’s good for them, it’s not going to be good for the rest of us. And Ackermann and Blankfein have just given us the best reason yet for maintaining a free market in pay.

(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Matthew Lynn in London at matthewlynn@bloomberg.net.

Last Updated: September 14, 2009 18:01 EDT