It is hard to imagine relations between banks and the regulators getting much frostier. In just the past few days the European Union has announced plans to cap bonuses and there have been reports that banks are plotting to retaliate by suing Brussels, citing a European court ruling on footballers’ pay as precedent. Has it really come to this?

The latest escalation in the rhetorical arms race is indicative of the broader climate of mistrust. Banks think that the regulators are asking far too much; the watchdogs think that banks are telling them far too little. It is hard to see how e'er the twain shall meet.