The debate on whether some US banks should be nationalised sparked words of caution and criticism on Friday from some Wall Street banking experts who said it was premature for the government to consider such a radical step.

“If the phrase ‘height of stupidity’ has any meaning, it would be shown if they nationalise a US bank,” said Rodgin Cohen, chairman of law firm Sullivan and Cromwell, who has advised on many of the past year’s biggest bank rescue deals and recapitalisations.