The beleaguered banking industry is under fire from a new direction. The world's largest tax authorities are setting their sights on the aggressive avoidance fostered by some banks' structured finance divisions.

This became clear this month when 40-odd government revenue heads discussed tax avoidance at a meeting in Cape Town under the aegis of the Organisation for Economic Co-operation and Development. The general mood of the meeting was conciliatory: they proposed forging an "enhanced relationship" with corporate taxpayers and advisers in the hope they would be more transparent in return for better treatment from the tax authorities.