The row, or is that outright war, over bank bonuses rumbles on. Vince Cable has never been shy in spouting forth his anti-bank rhetoric, but now even the man who is normally the bank’s friend, Boris Johnson, has made a speech criticising bank bonuses.

And yet still the threat remains: You stop our bonuses, then we will move elsewhere. Singapore, for example, and London will be left to pick up the scraps.

And it’s a tough one. The FT waxed lyrical because JP Morgan has chosen to move into the old Lehman Brothers building. It shows the bank is serious about London, suggested the pink ’un. And yet not so long ago the bank was planning to have a building tailor made, a building planned to shine out over London, a beacon for the capital and those who think its streets are paved with gold.

And now there is talk that US and Swiss banks are to pay their top execs higher salaries in order to circumnavigate new regulations on bonuses.

And the banks say if you stop our bonuses, our top people will move out of London and that will be a crushing blow for the London economy.

Frankly, London is under threat.

On the other hand, the alternatives are not so attractive. Land is scarce in Switzerland. Anti-bank rhetoric is just as vicious in the US, but maybe in the UK it is more so. And maybe London’s mantle is set to be shaken, and very hard.

But the difficulty is that it really is questionable how useful some of the banks’ activities are. It is questionable how good for the economy high bonuses are, because the financial institutions suck the talent out of other, potentially more productive sectors. High bonuses lead to an explosion in house prices, and that is probably a bad thing.

But whether banks do good or bad, the fact is the forces that are at work are global. Bankers are well paid because global market forces make it that way. And the City does well if it can sit centre stage in this highly lucrative global business.

Does it matter if banks don’t do much good? Just suppose that playing with paper clips was a growth sector, and paid out huge salaries. As an industry it might not be useful, but the cities that can embrace this market will do well, all the same.

The truth is, the UK government is like flotsam and jetsam, powerless to make a mark upon global banking regulation. Regardless of whether it is the right thing to do, the government simply can not afford to tax banks by too much.

Alas, what we are seeing is the downside to globalisation. Globalisation means more wealth is created across the world. But it means the markets rule, regardless of whether they are right or wrong.

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