Barclays says that its plan to shore up its balance sheet is both “bold and decisive”. Is it? Let us cut through the rhetoric and retain a touch of perspective. Banks are in the business of taking risks, which sit on their balance sheets. Barclays has a balance sheet equal in size to the annual economic output of the UK. That offers considerable opportunity for loss.

Barclays currently funds 97.8 per cent of its risk-taking with debt and 2.2 per cent of its exposure with loss-absorbing equity. Prodded by its regulator, Barclays has agreed to reduce its debt funding to 97 per cent and raise its equity funding to £3 for every £100 of risk taken. This is progress. It is certainly better than a poke in the eye with a stick. But does it deserve to be called bold and decisive?

Once the new equity level has been achieved, Barclays will be able to suffer a 3 per cent decline in asset values before going bust or calling upon the taxpayer for assistance. Are you reassured? The 3 per cent target translates into a capital shortfall of £12.8bn. The gap will be plugged with a combination of new equity, hybrid debt, retained earnings and balance-sheet shrinkage.

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Read the full Financial Times op-ed from Robert Jenkins here (subscription required)