Let’s get this right. The government thinks the EU bonus cap is barking mad because its imposition will heighten financial instability. Banks will merely whack up base salaries, thereby inflating their fixed costs and creating bigger risks, especially during a crisis. This analysis is shared by the Bank of England. And the government feels so strongly that it is fighting the cap in the European courts. . .

http://www.theguardian.com/business/nils-pratley-on-finance/2014/apr/25/bonus-cap-treasury-rbs-pay