[I]t had regulators fearing it could undermine the Treasury’s efforts to stabilize the financial system if banks tried to flee the bailout program or if other firms refused to participate in coming rescue operations to protect their bonuses, some executives said. ...
Several banks are considering refusing to participate in government financial rescue programs if the bill passes, according to a person briefed on the banks’ plans.
Update: The Journal has more lousy consequences:
But privately, there's concern within the Obama administration that the angry political atmosphere now surrounding the federal bailout program will scare away private participants the government needs to help bolster the financial system.
Treasury Secretary Timothy Geithner's financial rescue plan is heavily reliant on hedge funds and private-equity funds, for example, to buy up the toxic assets at the heart of the financial crisis. ...
Some Wall Street firms said the bonus tax could drive away top talent. At one large U.S. financial firm, an executive complained that headhunters representing foreign banks had already been calling the firm's employees.