A few weeks ago, the chairman of a listed UK industrial company took a call from a senior American investment banker. They chatted about the possibility of doing business, perhaps some advisory work or capital raising. Nothing unusual about that. Until, at the end of the conversation, the banker suggested that if the chairman ever fancied the idea of going private, the American bank would be happy to oblige in not just arranging the financing but buying the company.

The conversation ended sharply. It underlined how investment banks are increasingly being lured by the irresistible charm of principal investment - just a few years after most banks spun off their private equity businesses because of conflicts of interest and substantial losses. As with the Sirens of Greek mythology, the sweet song of private equity risks smashing investment banks against the rocks. They would do better to follow the example of Odysseus - strap themselves to the mast, fill their ears with beeswax and sail straight past.