The Bad News: Much of the world would give their right arm to have the FS industry centralise in their own countries, because of the effect it would have, long-term, on their GDP. Many countries offer huge incentives to try to attract the industry. what this means is that acting on a national level (let alone an industry level) would only result in our cutting our noses off, because the damage of losing this industry would be much more dramatic than the damage caused by holding it up. The ripple effect of the jobs lost, the tax revenue lost and the potential effect on UK house prices would be huge. Be careful what you wish for.
Claig - you wanted names. Well how about HSBC? Largest bank in the world and many of the key decision-makers in the bank(including Board memeners) are in the process of relocating from London to Asia. The top tier of high earners will go with it to Asia and then, slowly, the rank and file of staff will start to become at risk of redundancy when the key management work out that local staff are cheaper than UK staff. and it is estimated that almost one third of Hedge fund owners have relocated form the UK as well (I'm not convinced personally that they would have been paying a fair whack of their money into the tax system but that still means that a lot of business is being lost)
The Good News: The last time a financial crash happened, in the 30's, the average salaries in the industry declined by around 50% (IIRC) over the following 10 years (and just like the recent crash, it had spiralled hugely before the crash), it took a while to happen because it took a while for the industry to restructure. It may happen again (but it depends really on the global economy as well). For the last year and a half bankers have been switching their pay structure so that they lock in 'fixed' salaries and are less affected by 'bonuses'. Which has protected them to a point but I think they are running out of room in terms of avoiding an eventually shift downwards in overal salary levels. They can only shuffle the deckchairs for so long and I think there has to come a point in time when the superflous elements (in both salary terms and job terms) get cleaned up.
FWIW I spent 20 years in an investmant bank (I'm not there any more), so I know the way they operate well. The headlines always attack the big earners and I think people assume everyone in the industry is paid hugely. But it isn't the case. for example Commerzbank are in the press today (google it and you will see) because the German govt is questioning their salary levels. It turns out that in an organisation that employs 33,000 staff, there are 35 traders earning above ?500k. which is great if you are one of them but puts the scale of the issue into perspective - for every 1,000 staff in that bank there is one person earning a really great salary.
The telephone number salaries of some at the very top are astonishing and unjustified in my opinion (no matter how much money you make for the bank), but if you take those chosen few out of the equation it is simply another industry with lots of people working hard. and outside of the veyr few high earners are a group of people who are undeniably well paid, but no better paid than good lawyers, or good accountants, or good doctors (ie the same wages as other professionals in their peer group at uni and the like). If we want to argue the semantics of whether they are of as much value to society as the other professions then so be it, but that's a capitalist vs socialist argument, and when I last checked the general election results no-one seemed to have the appetite then.