The Fed and President Obama got the headlines they wanted. The NYT wrote Friday that the Fed will propose “Sweeping Rules to Regulate Pay at Banks,” while the WSJ said that “Bankers Face Curbs on Pay.”

The rules could mean a change in the mechanics of financial compensation, and thus for New York City and state taxing and budgeting. But by themselves, they likely won’t mean any harsh caps on pay. Lower bonuses should result instead from the market forces stemming from two badly needed regulatory changes: strict borrowing limits on financial institutions and the end of “too big to fail.”

Why (thankfully) no direct, harsh caps? Washington — probably in the person of Larry Summers — knows that it’s crazy, in the short term, for the federal government to do something to New York’s bankers that’s tougher than what Britain’s government has done to its bankers. And since the Fed wants the president and Congress to give it more powers, it’s not likely going to to do anything to upset the politicians.

So what has London done? Not too much.

Britain’s Financial Services Authority (FSA) has amended its regulatory code to add a “Remuneration Rule,” now in effect. The rule requires firms to “establish, implement, and maintain remuneration policies, procedures, and practices that are consistent with and promote effective risk management,” and broadly disclose pay policies and ranges.

The FSA helpfully adds that to do this, banks should award their bonuses based on profits at both the firm and individual divisions, that banks should adjust bonuses for the risks that employees take in pursuit of those bonuses, that banks shouldn’t guarantee bonuses for more than a year, and that banks should pay out bonuses over a longer-term period, like three years, so that part of the money can easily be taken back if performance doesn’t work out as planned.

This rule is similar to what Swiss investment bank UBS did last year on its own, although Britain’s rule — and likely the American rule — will apply to traders and bankers as well as top execs.

As FW wrote when UBS made its announcement, lagged bonus payments may mean a change in tax-revenue collections for New York.

It’s unclear whether New York (city and state) could tax the entire value of an employee’s annual bonus if two-thirds of that bonus were held back for a couple of years by the awarding firm. After all, the bonus still carries a real liability for the employee; it is not fully earned income, and it’s not in the person’s pocket.

Will the rules mean smaller bonuses overall? By themselves, not necessarily. Adjusting bonuses for risk, as the Fed could mandate, is in the eye of the beholder. A few years ago, the employers who allowed workers to earn huge sums of money structuring and trading complex mortgage-backed securities didn’t think it was a very risky business.

In the end, everyone will just end up doing what everyone else is doing, not just here, but overseas too.

Also, banks are likely to see a niche profit opportunity in helping their employees to borrow against the collection of next year’s part of this year’s bonuses. Private bankers already help executives borrow against things like restricted stock. It’s unclear whether the Fed has thought of this, and how it would fit into the Fed’s regulation.

What would make bonuses smaller would be higher capital requirements to limit firms’ borrowing, as well as capital requirements that were uniform across different types of securities no matter what their supposed risk, so that financiers couldn’t win points for gaming the rules through structured finance.

Ending “too big to fail” would push bonuses down, too, because lenders wouldn’t be so eager to trust banks and investment firms with their money.

Some days, though, prospects for such real reforms seem less likely than they did a year ago. Washington and London (and Brussels and Paris and Frankfurt) are helping us to forget about the real problems by focusing on bonuses, which are/were the symptom.

Yet, with all of the uncertainty in the air, and with a financial sector that can return to its bubble-era size and grow further only with the continuation of near-explicit government guarantees, it’s still folly for New York to continue to budget as if it were 2006.