Ihave been a banker for more than 40 years and have experienced financial crises in many forms. During these four decades, government policies towards my industry have swung like a pendulum, alternating between regulation and deregulation. The pendulum is about to swing again.

In considering where the equilibrium should be, there are two questions we should ask. First, will the new medication prescribed by bodies such as the Basel committee on banking supervision work on the root cause of the crisis? And second, what side-effects will healthy banks suffer when required to take it?”

There is an easy, common-sense way to get at the answers: simply to imagine what would have happened in the past had the proposed regulations already been in place. After the collapse of Lehman Brothers in autumn 2008, for example, Japan's corporate bond and commercial paper markets ground to a halt as share prices plunged globally. Our bank experienced a surge in demand for loans – the equivalent to more than 10 per cent of our entire loan book.