Just as the banks were breathing a sigh of relief. The US Treasury’s plans for regulatory reform, expected later this week, look set to maintain the existing patchwork of banking regulators, while beefing up systemic risk control. However, the authorities want to get tough on practices whereby boom-time lenders sold on shoddy loans to securitisation vehicles, spreading the pain of the eventual defaults round the financial system.

In one sense, the requirement that originators retain 5 per cent of the credit risk of securitised assets – unhedged – is going back to the future. Keeping some “skin in the game” (to use the phrase of the moment) was the norm before the urge to free up capital and treat securitisations as a sale for accounting purposes prevailed. The latter is also out of favour. Banks will have to log income over time according to how assets perform, rather than record gains upfront.