European politicians are close to taking the nuclear option on bank pay, which Michel Barnier, the EU’s top financial services regulator, recently described as “morally indefensible”. The proposal for a one-to-one cap on variable pay – meaning that annual bonuses could never be larger than an employee’s base salary – was approved by members of the European Parliament’s economic and monetary affairs committee earlier this month.

The measure, which will be debated by the parliament and national governments before becoming law, already looks unnecessary. City payouts fell by about a third in 2011 and are expected to halve this year, according to the Centre for Economics and Business Research.