The second weakness is that national bank supervisors get too close to the institutions they are supposed to be policing, and treat them too leniently, to the detriment of taxpayers and sometimes other countries that also suffer when a big bank fails.

WSJ: In Cyprus Rescue, Germany Forged a New Vision for Bank Union

The impact, however, will be partly softened for the City of London by giving more favourable treatment to long-term pay linked to the health of a bank, such as equity or bonds that are written down when an institution fails.

CNN: EU secures deal to cap bankers' bonuses