The message the European Central Bank has sent by objecting to Deutsche Bank AG’s proposed bonus pool is unmistakable in the midst of a pandemic, but the banking regulator needs to be careful about unintended consequences.

The European Union is on a concerted post-Brexit drive to lure highly-paid bankers to the continent from the City of London, as my colleague Elisa Martinuzzi has written. Regardless of the merits of Deutsche’s original plan to pay out more than 2 billion euros ($2.4 billion) for staff performance in 2020 — now scaled back because of the ECB’s reservations — bankers and traders do pay close attention to these things. Their expected levels of pay will help determine whether they up sticks for Paris, Frankfurt, Amsterdam or wherever.

Deutsche’s checkered recent history — its shares are still a fraction of what they were in 2007 — does justify the ECB’s qualms about excessive rewards in its particular case. For management to try to raise the bonus pool by more than a third was punchy when the regulator was clear in its guidance that restraint on bank dividends and executive pay is required right now. Banks didn’t cause this crisis, but they’ve benefited from a loosening of their capital rules, cheap ECB loans and the injection of vast amounts of public money into the economy. Outsized pay goes against the collective spirit.

The ECB is in a delicate situation and it has signaled that it doesn’t object to Deutsche’s reduced compensation plans. It has a regulatory duty to make sure Europe’s banks don’t wreck their balance sheets and to monitor the reputational impact of variable-remuneration payments, which as it stated in a summer missive “shouldn’t be underestimated.”

Nonetheless, messaging counts and investment banking is a competitive sport where the star players will go wherever they feel there are the fewest barriers to their own wealth. The finance industry had a banner year in 2020 — boosted admittedly by central bank money and the bubble in asset prices — and this year is shaping up to be just as lucrative. After several years of cutbacks, there are plenty of international firms that may be on the hunt for extra staff.

It will be easier for Wall Street banks to lure rainmakers disenchanted about not being rewarded for past performance and fearing whether they’ll be paid a market rate in the future, and easier for London to persuade people to stay. There have been suggestions that the U.K. might lift its own bonus cap. Not having the best people could hobble European banks’ recovery prospects just as they’re getting off their knees after a rare run of positive quarters.

Take Deutsche, which has a wider spread of international employees than most European banks. These staff are highly mobile so the company has a genuine need to offer competitive pay to its superstars. Big banks prefer hiring from each other, and their employees tend to be driven by self-interest. Human nature doesn’t always fit neatly into regulatory thinking. Bonus caps, however merited, will have Wall Street headhunters salivating.

There has been a lot of fanfare over the post-Brexit shift of financial business from London to the continent, too, but so far this has been limited to not especially lucrative share trading heading to Amsterdam. The real fight will be over the finance industry’s risk-takers and decision-makers. The ECB has to be mindful of individual incentives as well as regulatory zeal.

Marcus Ashworth is a Bloomberg Opinion columnist covering European markets.

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