Where's the set back for the city?

As this actually affects the whole of the EU, as opposed to just London, those affected would need to move out of the EU itself should they chose to do so.

As mentioned the most likely effect will an increase in basic pay.

the financial district in London.

The setback is the crooks will be limited in how much they can steal....

..

even though I think it all starts by allowing too big to do fail when appropriate, and prosecuting the guilty. So to "extremists" like me, this isn't enough
I mean come on, there still is NO plan to (re)separate retail and investment banking...and Basel III is being pushed further and further away.

Still, being a convinced internationalist turned eurosceptic ever since I've seen how we handled the crisis and since austerity for the masses, things like these do make me go "not all in the EU parliament are beyond hope". I am for the EU but not this EU is my position.

But it represents a setback for the British government, which had long argued against such absolute limits. The City of London, the region's financial capital with 144,000 banking staff and many more in related jobs, will be hit hardest.

David Cameron said that he would "look carefully" at the proposed new regulations while defending the UK's position as an international financial hub.

"We have major international banks that are based in the UK but have branches and activities all over the world," said the British prime minister. "We need to make sure regulation put in place in Brussels is flexible enough to allow those banks to be competing and succeeding while being located in the UK."

Such limits to bankers' pay, which is set to enter EU law as part of a wider overhaul of capital rules to make banks safer, will be popular on a continent struggling to emerge from the ruins of a 2008 financial crisis.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9899024/Blow-for-City-as-Brussels-agrees-banker-bonus-caps.html

There has been plenty of noise of late from the conservative wing of Cameron's Conservative party (not to mention the even further-right parties like UKIP) about the UK withdrawing from the EU.

This effort of the EU to impose more restrictions and regulation on the finance industry (which is a huge deal in the UK) will likely stoke more of this sentiment.

He will fight the plan

http://www.guardian.co.uk/business/2013/feb/28/uk-fight-eu-cap-bankers-bonuses