As reported in our letter to The Times of June 24, the Chancellor and Prime Minister seem to have agreed the French inspired proposals to hand financial regulation, albeit not supervision, over to Brussels. We surmised that to have been the price of Sarkozy’s attendance at the G20 meeting in April.

What was puzzling us then and since is why neither the City nor the Tories have risen up in protest. Do they believe Lord Mandelson’s soothing words that he will see the City all right? More likely is that the large British banks would actually prefer EU to British regulation and are lobbying to that end. Angela Knight has said as much in Parliament’s house magazine in the last few days. This is carrying hostility to the FSA too far. EU regulation is bound to blunt the UK's pre-eminence in financial services.

The financial crisis has revealed just how dumb our banks can be. Little seems to have changed since. Will someone please stand up for our last remaining major industry?