There are so many things wrong with the proposed European Union cap on bonuses that it is difficult to know where to start. But critics of the cap have done themselves a disservice over the past few weeks in at least two ways.

First, they have overplayed the likely impact of the bonus cap on banks headquartered in the UK and on the City of London as a financial centre. And second, they have chosen to argue against the cap in economic terms, instead of seeing it as primarily a political move by European politicians who have lost patience with the stubborn resistance from the banks to every proposed reform over the past few years.