Workers at the Swiss bank UBS and JPMorgan Cazenove, one of the oldest names in the City of London, were arrested for alleged insider dealing on Tuesday as police raids sent a chill through the UK capital’s trading rooms.

The arrests mark the third high-profile action the Financial Services Authority has taken in the past week over insider trading, in a sign of a tougher approach to a problem the regulator believes is rife in the Square Mile and a threat to the integrity of the markets.