“Public discussion of financial regulation is a bit like the discussion of nuclear power safety. Everyone acknowledges the importance of prudence but few are conversant with the technical details. The challenge is complicated by the jargon in which the subject is steeped. Financial regulators slip into sentences laced with an alphabet soup of terms that only a rule-making nerd can navigate – to wit: Basel III, GSifi, FSB, FSOC, FPC, PRA, FCA, not to mention LTV and RWA. Lost in this lexicon, the layman despairs.

“Yet so important is this topic to the taxpayer that it behoves us to explain it in a way that even a failed bank director might grasp. So allow us the following metaphor.

“Once upon a time, in a not-so-distant land, a people prospered on a rapidly expanding supply of fuel. Every day, heavily laden tanker lorries sped through the streets to deliver their product.

“The more the economy grew, the more demand rose for deliveries. The handful of fuel companies responded. They marshalled more vehicles and hired more drivers – however inexperienced or poorly supervised. To reduce downtime, maintenance schedules were loosened. To reward efficiency, bonuses were offered for each delivery achieved.”

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