A couple of months ago, I aired a proposal for tackling banks judged too big to fail: an insurance fund, paid for by the banks, to compensate us taxpayers when we had to rescue them.

In these timorous times, I had little hope the idea would be taken up. But a more developed version has now arrived in a paper from a central bank veteran, Michael Taylor*. And the awkward thing is that on closer inspection, I do not think it will work.