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.
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Conservative Ben Bradley admitted his claims were 'wholly untrue and false', and pledged a 'significant' donation to charity.
Turning bitterly cold into next week with freezing temperatures by day and night
It comes as 22 charities signed an open letter vowing to improve safeguarding, and apologising for 'failures' in the sector.