Government proposals to strengthen bank regulation in the aftermath of the Northern Rock debacle risk damaging the UK financial services sector, the director-general of the CBI, the employers’ body, warned on Thursday night.

Richard Lambert said hurrying through “seismic changes” in the banking system would make the same mistake as the US Sarbanes-Oxley legislation. Pushed through after the collapse of Enron, it had had seriously damaging consequences for the US corporate sector.