FT.com – During the credit boom, senior executives at the world’s largest investment banks often argued that businesses had improved in two significant ways. They had become better at managing trading risk. And their pay structures were more flexible, allowing them to cut costs rapidly in a downturn. The subprime meltdown, which has so far been responsible for almost $40bn of losses at Citigroup (NYSE:C), Merrill Lynch, Morgan Stanley (AMEX:MWD) and UBS (NYSE:UBS), has put paid to the first claim.