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Chancellor George Osborne has arrived in Brussels to launch a fresh assault on capping bankers' bonuses at the first formal negotiations on the plan between Europe's finance ministers.
The meeting will consider a provisional proposal pushed last week by MEPs and backed by the European Commission.
Paul Kavanagh from the investment firm Killik and co. said that new plans to cap bankers' bonuses will "create a very uncompetitive environment for many banks."
Speaking to Daybreak he added: "Not all pay is irresponsible pay."
As part of a financial reform package, ministers will consider a provisional proposal pushed last week by MEPs and backed by the European Commission.
Finance ministers in Europe are meeting today to discuss whether bankers' bonuses should be capped.
Simon Chouffot from the campaign group Robin Hood Tax has said that because of the size of our financial sector, we should have "the most to gain, not the most to lose".
He said that politicians were too busy fighting for a small group of bankers, when they "should be batting for the wider interests of Britain."
Under the terms of the new deal, bankers' bonuses will be limited to a maximum of one year's base salary, or twice the salary if a large majority of shareholders agree.
Chancellor George Osborne is warning that capping bankers' bonuses will drive banking business away from the EU, and the UK.
New plans for banks to set aside more money to help small business, will see stricter limits on salaries to increase liquidity.
At a meeting in Brussels today, ministers will consider a provisional proposal pushed last week by MEPs and backed by the European Commission.
Under the terms of the new deal, which is subject to qualified majority voting, bankers' bonuses will be limited to a maximum of one year's base salary, or twice the salary if a large majority of shareholders agree.
It comes as part of a financial reform package, including the introduction of higher capital requirements for banks, intended to prevent a repeat of the financial crash of 2008.
The agreement limits bonus payments across the EU to, at most, twice bankers' annual salaries.
Prime Minister David Cameron has insisted that it must be implemented in a way that takes into account the position of London as a global financial centre.
Banks have increased salaries across Europe by 37 per cent in the past four years in response to the current crackdown on bonuses.
Latest ITV News reports
The UK has lost the overall battle on whether to put a cap on bankers' pay. George Osborne hopes to shape how that system will operate.