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My analysis of the latest cash-flow figures for the two main political parties yields two stark conclusions:

1) Labour is dangerously dependent on funding from a tiny number of wealthy individuals and trade unions;

2) The Tories still rely on contributions from the City of London and financial services, especially hedge funds and fund managers, to a considerable extent.

In the crucial second quarter of this year, from 1 April to 30 June - the general election quarter - the Tories and Labour received almost identical cash donations, according to figures supplied to the Electoral Commission. The Conservatives received £10.23m and Labour £10.3m.

The cash was much more important for Labour, because for some years now it has been lagging well behind the Tories in fund-raising. But when Labour's late surge came, some 68% or £7m of that £10.3m was provided by just four extraordinarily wealthy individuals and four trade unions.

Lakshmi Mittal, the steel magnate, Nigel Doughty, the private-equity pioneer, Lord Sugar's private company and Lord Sainsbury collectively donated £2.75m, with Mittal and Doughty each handing over £1m.

A further £4.2m came from the GMB, USDAW, Unite and Unison.

Now it's very doubtful that Labour's new leader, whoever that turns out to be, will believe it is good either for Labour or for democracy that Labour's financial fate - and by extension, its political fate - is in the gift of a quartet of plutocrats and a quartet of trade unions.

That said, it is not at all obvious how the new leader will be able to significantly broaden the party's sources of funding. And making the case for state funding would not be easy, under the long shadow of the parliamentary expenses scandal.

The Tories, by contrast, didn't receive a single seven-figure donation. In fact, six of the gifts to Labour were bigger than the largest single contribution to the Tories, which was £750,000 from JCB Research, an arm of the Bamford family's construction equipment business.

But the Conservatives would be considerably poorer if they hadn't received substantial financial support from City firms and individuals.

My estimate of what the Tories were given by City interests of various sorts is £2.5m, or almost a quarter of their cash receipts.

In that estimate, I've only included the names of donors whom I recognise. So my hunch would be that the actual amount of City money received by the Tories would be a bit more.

Why does it matter that the City is a substantial prop of the Conservative Party?

Well, there is an important debate taking place about whether the British economy is too dependent on the financial sector - and if it is too dependent, whether that dependence should be lessened by shrinking the relative size of the City or the absolute size of the City.

To state the obvious, those important City donors to the Conservative Party would presumably not be pleased if the coalition government became converted to the view that the absolute size of the City is too great.

However, it is striking that the Conservatives are not beholden in any way to the big banks. Neither an executive of a big bank nor a big bank as an institution has made a meaningful contribution to the Conservative Party.

So if the coalition were to bash the big banks - through additional taxes or by way of breaking them up - that would not (in theory) cost the party a penny in lost donations.

On the other hand, hedge funds and investment managers are a very important source of finance for the Tories.

Here are some of the well-known hedge fund names who have donated in the three months to the end of June, with their donations in brackets next to them: Jon Wood (£500,000), Michael Farmer (£258,000), Moore Capital (£200,000), Michael Hintze (£123,000), David Harding (£50,000), Michael Alen-Buckley (£25,000), and Manny Roman (£15,000).

The names of Wood and Alen-Buckley are particularly resonant, because their funds - SRM and RAB respectively - lost colossal sums as investors in Northern Rock after the previous government nationalised the Rock.

Of course that doesn't mean that David Cameron and George Osborne will bend over backwards to help hedge funds.

But the prime minister and chancellor do have a financial incentive to listen carefully to the hedge funds, in this the final stages of important negotiations on new European rules governing hedge fund regulation and remuneration.

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I wish I could say I was overjoyed to be back in the supposedly real world, after a few days being revitalised by the benign winds and periodic sunshine of the Welsh coast.

But everywhere I look this morning there are gloomy stories about pensions (see the front pages of the and , for starters) - and, of course, there is a direct relationship between the perceived salience of pension issues and age (which is why they oppress me and my contemporaries, and why younger people can't be bothered to save for a pension at all).

But here's the good news: the devastation of the savings of those like myself who have put money into pension pots for 20 or 30 years can be seen as healthy "natural justice".

Readers of this blog will be well aware - if they weren't already - that the distributional impact of the economic boom and bust of the past decade has been uneven and (in the view of many) deeply unfair: younger people have suffered the most in respect of rising unemployment, and even those lucky enough to have a job still can't afford to buy a home, because house prices remain high relative to earnings (and 100% mortgage-finance is no more).

But at least there's one less reason for impoverished youth to take to the streets to overthrow the pampered baby-boom generation, which arguably created the economic mess we're in.

Unless you happen to be the chief executive of a FTSE 100 company (most of whom have succeeded in retaining the most lavish, platinum-plated pension arrangements), or a senior public servant (with their gold-plated pension schemes), the pensions outlook for those aged 45 and over no longer looks quite as spectacularly good as it did.

It's mostly to do with the slashing of interest rates and the unprecedented easing of monetary conditions, engineered by the Bank of England (and other central banks) to prevent the Great Recession turning into a depression.

The point of near-zero Bank Rate and the creation of £200bn of new money was to ease the pain of those who had borrowed too much and prevent the credit tap from being turned off completely: but, as many of you are painfully aware, in the process the thrifty have been punished, whether they had their money in a savings account (whose interest rates have fallen to derisory levels) or a pension pot.

This has had a devastating effect on the sustainability of final salary savings schemes and on the returns for those putting cash into defined contribution schemes.

Low interest rates and thus the low returns available from high quality government and corporate bonds means that the income available from annuities - which savers in personal pensions have to buy when they want their pensions - has dropped by more than 6% over the past year and 45% over the past decade (according to Moneyfacts).

To translate, if you retire today with a pension pot identical to that accumulated by your older brother when he retired 10 years ago, your pension will be around half what he receives.

And the same phenomenon of plummeting bond yields - and reductions in the so-called "discount" rate - has the effect of massively enlarging the net liabilities of final salary pension schemes (think of falling bond yields as a reduction in the return available from the supposedly safest investments, which means that companies have to invest more cash each year in their pension schemes to cover a specified quantum of pension commitments).

According to the KPMG Pensions Monitor, the deficits of FTSE 100 companies have increased by £15bn this year to £65bn and by more than 60% since 2008.

And - as the Institute of Consulting Actuaries has helpfully reminded us this morning - employers are soon to face an obligation to "auto-enrol" all their staff into funded pension schemes, which will introduce an additional pension burden on them.

Here's what most of you don't need telling: more and more businesses and institutions are looking at these swelling liabilities and concluding that they're unaffordable - so many of them are devising strategies to scale back what they pay to future pensioners (a big hello to my own employer).

This is true of both the public sector and the private sector.

So if there's a faint smell of unrest and insurrection in the air, it may be that common cause for protest is being found by the two groups who would see themselves as the innocent victims of the Great Boom and the Great Bust: those so young that they haven't had time to build either career or savings; and those with retirement on their minds, whose savings income and pensions, they might say, have been deliberately squeezed to bail out the feckless.

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For me, the most interesting bit of RBS's 303 pages of info on its first half results (a case, I fear, of more is less - lots of duplicated and baffling detail) is the stuff on the asset protection scheme (APS).

This is the insurance contract written by the government to protect RBS against losses greater than £60bn on more than £200bn of poor quality loans and investments.

Now RBS accounts for the contract as though it were a credit derivative.

What this means is that when conditions in the credit market deteriorate, it books a profit on the APS contract. And when they improve, it books a loss.

The logic is that the contract becomes more or less valuable according to perceptions - as reflected in interest rates paid by riskier borrowers relative to those paid by risk-free borrowers - of whether life is becoming easier or tougher for borrowers.

Because it's such a huge contract, the impact of the changing valuation of the contract is material.

In the first quarter of 2010, RBS booked a £500m loss on the APS. But as conditions in credit markets deteriorated (a big hello to the eurozone and its woes) the value of the contract rose for RBS, so it booked a £500m profit.

The corollary, of course, of the rise in the value of the contract for RBS is that it represented a notional loss for taxpayers.

So the chancellor will be relieved that the public sector doesn't use mark-to-market accounting, so he doesn't have to declare this loss.

In fact as and when the APS contract is unwound, the chances are that the public sector - the taxpayer - will be sitting on a fat profit, based on data provided by RBS today.

The amount insured under the contract has fallen from £231bn to £216bn, due largely to "maturities, amortisation and repayments" of loans (yes, some of RBS's troubled borrowers are paying their debts).

More relevantly though. RBS expects to incur just £20bn of losses on some £37bn of loans covered by the scheme where the borrower has gone bankrupt or cannot repay for other reasons.

So for the taxpayer to incur any loss on this insurance contract, RBS would have to suffer more than £40bn of additional losses on the remaining insured loans and investments, which have a gross value of less than £200bn.

Now unless we tip back into severe recession, that looks unlikely to happen.

So the chances are that the taxpayer will pocket the handsome fee for the insurance and never pay out a penny to RBS.

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Assessing the health of Royal Bank of Scotland is always tricky, because of the complicated way it bought the rump of the Dutch bank ABN in 2007, its desire to shed certain low-quality assets and the eccentricities of accounting rules.

That said, the semi-nationalised bank does appear to be on the mend - although it's a long way from full strength.

In the first half of this year, it went from more-or-less break-even to a profit of £1.1bn - thanks to a £2.4bn drop in the charge for loans and investments going bad, and a rise in the gap between what it charges for loans and what it pays to borrow.

That said, the bad debt charge in the operations it wants to keep, its so-called core business, hardly fell at all, and remains at £2.1bn (compared with £2.2bn last year).

As for the rise in the so-called interest margin at most of the banks, that may be the next front in politicians' and journalists' attacks on the banks - because it's ammunition for those who complain that banks are charging households and businesses too much for credit.

In RBS's retail operations, for example, the interest margin widened from 3.57% to 3.77% (still a long way from the 2004 peak of 4.7%).

What of the current preoccupation of many bank critics, that they are not lending enough to small businesses? Well, RBS - like the other banks - insists that in the current climate it can't lend faster than its customers want to repay their existing debts.

So although it provided £14.4bn of gross new loans to small business, net lending to that important part of the economy fell.

Update 0744: On the widening of the interest margin, RBS would of course point out that regulators are forcing it to hold more capital relative to assets, which forces it to charge relatively more for loans to maintain its return on capital...

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George Osborne's Banking Commission - set up to review whether big UK banks should be broken up - could, I suppose, have been called the Barclays Commission.

Because probably the biggest dilemma for that commission will be to determine whether Barclays epitomises the dangers or the benefits of combining retail banking and investment banking.

Barclays' chief executive John Varley is in no doubt about what the economist Sir John Vickers and his team ought to conclude.

He argues, in a statement accompanying today's half-year results from Barclays, that:

1) customers are better served by a global "universal" bank offering retail and investment banking services;

2) "the history of banking in the last 100 years reveals a broadly based structure to be the banking vehicle most resilient to extreme climates or shocks";

3) that the mix of Barclays' operations has the effect of diversifying risk rather than concentrating it, as manifested in Barclays aggregate pre-tax profits of £25bn since the financial crisis began almost exactly three years ago.

I'll leave for another occasion a comprehensive assessment of whether the economy would benefit from dismantling universal banks such as Barclays. For now, three counter-arguments are worth considering:

1) it was touch and go in the autumn of 2008 whether Barclays could survive without a direct investment from taxpayers, without being rescued by government;

2) arguably Barclays' investment bank has had an unfair competitive benefit from being married to a retail bank, in that its cost of funding has been lower than would otherwise have been the case, thanks to creditors' correct perception that the government would always bail out the retail bank if it got into difficulties (this is an argument that the Bank of England would make, for example);

3) there are plenty of examples of universal banks - from UBS, to RBS, to Citigroup - which were less successful than Barclays at diversifying risk and which therefore needed to be bailed out by taxpayers on a mindboggling scale.

Do Barclays' latest figures settle the argument decisively in one direction or another?

In respect of the issue of the moment, whether the banks are providing enough credit to smaller businesses, there's no evidence that Barclays is providing a significantly better or worse service to the British economy than its peers.

Stripping out the impact of the takeover of Standard Life Bank and of Barclays' increased market share of mortgage lending, loans to retail banking customers - which include small business customers - were broadly flat over the past six months.

And in corporate banking, which serves medium-size companies, loans and advances to customers in the UK and Ireland fell over the same period from £55.6bn to £52.8bn - because of what the bank describes as "lower customer demand".

Barclays, like Lloyds and HSBC, is saying that you can take the corporate horse to the water, but you can't force it to drink.

That said, the corporate horses which talk to me complain either that the price of the water is too steep or that the banks see them (unfairly) as old nags and sickly foals which don't deserve nourishment.

What's relevant, however, is that universal Barclays doesn't seem to be behaving markedly differently in respect of how much credit it provides to small and medium size businesses than narrower Lloyds.

Some would argue, I suppose, that Barclays' sheer size and diversity allows it to cope better with economic life's little misfortunes.

So, for example, it has had a bit of an embarrassment in Spain, where there was a £443m increase in the charge for bad or impaired loans, which was "driven by the depressed market conditions in the property and construction sector".

That would be enough to sink a medium-size Caja, or Spanish savings bank. But the loss is just a pimple on the face of Barclays' overall pre-tax profits of £3.95bn for the six months to 30 June.

By the way, for those of you who remain deeply anxious about the prospects for the eurozone, you'll note that Barclays has £18bn of Spanish mortgages and personal loans on its books, and a further £19bn of Italian and Portuguese retail loans. As for its wholesale exposure to Spain, Italy, Portugal and Ireland, that's £41bn.

Which is not a trivial exposure to economies widely seen as susceptible to further shocks - although Barclays, of course, insists that these loans and investments are decent quality.

What else to flag up?

Well, like all the big investment banks, Barcap suffered a significant fall in "top line" income - down from £10.5bn to £7.1bn.

But total income was flat, after deducting credit market losses (which diminished from £3.5bn a year ago to almost nothing in the latest period).

So it looks as though it will be a decent year for investment bankers' bonuses at Barcap, rather than a bumper one. And for the first half, average remuneration for Barcap's 25,000 employees was a bit less than £120,000 per head (or, at least, Barclays has made a provision to pay salaries and bonuses of that magnitude).

As for Barclays as a whole, the basic story is the same as we've seen elsewhere: profits have risen sharply driven by a sharp drop (of 32%) in the charge for loans and investments going bad; but with the economies of the UK and eurozone still pretty weak, Barclays is not finding it easy to generate extra income.

Which takes us back to the question of the moment, which is whether the banks themselves could and should be doing more to strengthen those economies.

Update 1254: I asked Barclays for more precise information about its net lending to small business (that's new loans minus repaid loans), because of the political sensitivity and economic importance of this statistic.

It said that net lending to businesses with turnover of less than £5m rose slightly and that net lending to businesses with turnover greater than £5m was flat.

Which is pretty similar to what Lloyds said.

Barclays also insisted that it was approving more than 85% of all applications for loans - which looks a bit better (according to conventional wisdom) than what Lloyds is doing (which said it was approving four in five applications).

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Eric Daniels has no intention of quitting, even though there are some who feel that the disastrous loan losses incurred by Lloyds - stemming from the controversial takeover of HBOS in late 2008 - mean that he's not the right chap to lead the bank in the longer term.

Or at least that's what he told me.

Daniels says he wishes to stay at the helm to build on the recovery under way at the bank.

How firmly based is that recovery?

Well some would argue that Lloyds is still too dependent on funding from taxpayers and also from unreliable wholesale sources.

Only 61% of Lloyds' loans to customers are financed by deposits from customers, the lowest ratio for any big British bank.

The remaining 39% comes from wholesale sources - and, as banks learned the hard way after the credit crunch started on 9 August 2007, these wholesale providers of funds can vanish overnight.

Also £132bn of this wholesale finance comes directly or indirectly from taxpayers and central banks.

Most of that £132bn comes from the Treasury's Credit Guarantee Scheme and the Bank of England's Special Liquidity Scheme - both of which need to be repaid by 2012.

Lloyds insists it can repay most of this by shrinking its balance sheet, by reducing how much it lends and invests - which of course has the effect of reducing its borrowing requirement.

The big question, that matters to all of us, is whether it can shrink its balance sheet in this way without starving businesses and households of vital credit, without precipitating what I've called Credit Crunch 2.

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As 41% shareholders, it matters to taxpayers that Lloyds makes a profit.

So after £13bn of losses over the past two years, it will be hard not to breathe a sigh of relief that Lloyds made a pre-tax profit of £1.6bn in the first six months of this year.

Why the big recovery? Well losses on loans and investments going bad have halved to £6.6bn and the ongoing running costs of the business have been reduced by £1.1bn, largely through job losses.

But it also matters whether big banks like Lloyds are doing enough to support the tentative recovery of the British economy.

There the evidence is more mixed. Lloyds says that it has provided £4.1bn of credit to small businesses, and says that it is ahead of targets agreed with the government.

But its total net loans to all households and businesses have dropped 1% to £368bn and it is charging more for that credit relative to what it pays for funds (the next interest margin has widened 24% to 2.44%).

By the way, this is only my first take on Lloyds' figures, and I will be filing more when I have time between interviewing Lloyds chief executive, Eric Daniels, and doing assorted live broadcasts.

Update 0848: In his interview with me, Eric Daniels insisted Lloyds is making ample funds available to small businesses.

But - and this is what other bank chief executives also say - many borrowers are choosing to repay their debts.

Which is why Lloyds net lending figures are flat.

Now there is a contradiction between what Mr Daniels and his peers say and the complaints of many small businesses that they can't get credit at the right price.

As I've pointed out before, the only way to reconcile this contradiction is on the basis that banks' assessment of whether a small business is credit worthy is harsher than the wannabe borrower's view of its own prospects.

PS I pointed out to Mr Daniels that the fall in the bad debt charge was greater than the swing from loss to profit. He nonetheless maintained that there has been an across-the-board improvement in the bank's basic operational performance.

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Northern Rock is back in profit - to the tune of about £200m - though that's slightly disguised by the break-up of the bank into two separate entities.

The swing from loss to profit over the past six months looks pretty impressive: stripping out one-offs, the Rock made a loss in the second half of last year of more than £100m.

But there's a paradox. It's Northern Rock Asset Management, the so-called bad bank - the bit that holds £50bn of mortgages and isn't going to be privatised - that made a healthy profit of £350m.

It is the new bank, Northern Rock plc, the one that's to be privatised, which suffered losses of £143m - because it is not lending enough to cover the interest its pays out on deposits and other finance.

What do these results tell us?

First, that mortgage loans are going bad at a slower rate, although it is striking that there hasn't yet been a fall in the number of mortgage borrowers who are in arrears: the number of residential mortgages accounts where the borrower is more than three months behind with the payments increased slightly, to 22,837, up from 22,564 at the end of 2009.

As for the loss on so-called impaired loans, that was £278m at Asset Management and an insignificant £0.4m at Rock plc, compared with £1bn for the whole of 2009.

Second, there's an excellent chance that the taxpayer will make a profit when all those Rock mortgages are finally repaid over the coming decade or more.

And this liquidation process will be quite something, after just under £50bn of buy-to-let and other loans made by Bradford & Bingley - the other nationalised mortgage bank - are crunched into Asset Management in the autumn.

In case you hadn't noticed, the government has become quite a player in the distressed debt market, with a loan book in run-off of about £100bn, financed by loans from the taxpayer of around £50bn (although, of course, the majority of loans made by B&B and the Rock would not count as poor quality or distressed).

Finally, Rock plc is a very immature bank, with £17.6bn of deposits financing just £11.2bn of mortgage loans.

As it stands, with limited products and 76 branches, it's more a bothersome flea than a ferocious tiger in the competitive struggle against elephantine Lloyds, Barclays, RBS, HSBC and Santander.

If the government wants to promote competition in the retail banking market, which is what it claims, it is going to have to think creatively about how it privatises the Rock.

It certainly can't be floated on the stock market in its current under-developed shape. And it's not obvious that a conventional auction over the coming few months would maximise the return to taxpayers - in that the competition authorities would probably block bids from all the big players, and bids from smaller players would be derisory.

That said, the twin aims of providing a fat profit for the state and stimulating competition in banking can be achieved if Rock plc can somehow be put into an arranged marriage with the 600 branches - which have 4.6% share of the retail banking market - that are being sold (under duress) by Lloyds.

If the Northern and Clydesdale businesses owned by National Australia Bank could also be included in the enlarged Rock, then a potentially significant new bank would be born.

To be clear, mergers of banks are ferociously complicated, because their IT systems and cultures are typically incompatible. But if George Osborne, the chancellor, wants to be true to his ambition of creating genuine choice in banking for British consumers, he is going to have to be imaginative in how he sells the Rock - and ignore the tantalising allure of the fast buck.

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Before you read on, do me a small favour and .

It's last week's publication from the Basel Committee on Banking Supervision outlining some amendments to the initial proposals put forward at the end of last year to strengthen banks in the wake of the 2008 financial meltdown.

Now I would hazard that even those of you who work or have worked in the banking industry would be nonplussed by much of it.

As is the norm for the Basel Committee - the supreme global decision-making body for banks - the concepts are complex and the language is highly technical.

For most of us, it's an impenetrable document in a mysterious foreign language.

Perhaps that's inevitable.

But just pause for a second. What happened in 2008, the collapse and rescue of the worldwide banking system, touched all of us: it turned a gentle recession into the worst recession since the 1930s; and we'll be living with the consequences, in the form of lower growth and squeezed living standards, for years.

Now imagine that the equivalent disaster had occurred in the airline industry, that almost every aeroplane came within a few seconds of dropping out of the skies.

In the aftermath, and however complex the engineering of a plane may be and irrespective of the intricacies of traffic control, the effort to mend and reform air transport would be conducted in full public gaze, using ideas and phrases understandable to all.

As citizens, we wouldn't tolerate anything else - and nor would politicians and regulators believe for an instant that they could get away with stitching up some ostensible solution in private.

So what is it about banking regulation that makes it inappropriate for discussion in front of the children?

Are banks intrinsically harder to comprehend than modern, computer-controlled aeroplanes? That would be difficult to argue.

Are banks less important to us? Well, few people die instantly when a bank crashes. But when a financial system crashes, and the world becomes poorer, vast numbers of people suffer - and some would indeed die, if the resources available for medical care were to contract.

It is therefore odd that the future of banking is being decided as it has been done for more than 35 years, behind closed doors in the quaint Swiss town of Basel by a committee of unelected central bankers and regulators.

The consequences of carrying on like this will be profound.

For example, it's all very well for the government and the Financial Services Authority to demand that non-executive directors of banks and shareholders in banks must be far better informed about the risks being run by their respective banks - and must be prepared to veto dangerous behaviour by those banks - but how can they exercise that responsibility when it's unlikely that they will understand even a fraction of Basel's rules for measuring and controlling risk?

So the clever clogs executives who run banks will be able to carry on as they have been doing for the past 30 years of globalised financial capitalism, which is to see the Basel strictures as the rules of a game to be exploited for vast profit.

It is inevitable that in any rulebook as long and complex as Basel's that there'll be loopholes and sloppy drafting and great unintended gaps. Banks will deploy their capital where the Basel rules understate the true risks, because that's where the highest rewards are to be found - and of course it'll take the regulators, and shareholders and non-executive directors too long to work out that they've been had.

It's what happened on a massive and devastating scale after the Basel l and Basel ll rules were introduced: banks engaged in too much property lending, in excessive off-balance sheet funding, in far too much lending to each other, in far too much investment in AAA rated securities manufactured out of subprime loans, because these were areas of activity either wholly ignored by the Basel rules or where the risks were not captured by the rules.

Inevitably, there'll be similar consequences from Basel lll, the new code that will determine how much capital banks must hold as protection against losses, how much cash and liquid resources they must hold against the threat of runs, and what proportion of their loans and investments must be financed by debt and liabilities of longer maturity.

Here's the question: rather than a rulebook that'll be even longer than the so-called comprehensive version of Basel ll - which runs to 347 opaque pages - wouldn't it be far better to have some very simple easy-to-understand principles, that capture the spirit of the kind of risks that our society believes are appropriate for any institution that has been given the privilege of taking deposits.

Underneath these principles there would be more detailed rules, giving different risk weightings to different categories of loan, or deeming certain kinds of capital as more valuable and useful than other kinds.

But it would be breaches of the principles that would attract greatest punishment and opprobrium, so there'd be no defence for a bank or banker who pointed to the minutiae of the rules to justify loading up the balance sheet with dodgy investments.

Is there any chance of such principles being agreed? Probably not, because national governments are so fiercely protective of what makes their banks different from banks in other countries.

If anything, that's the big message underlying the gobbledegook in the Basel Committee document I made you read at the outset.

I'll translate three parts for you.

1) On the final page, there's a reduction from 100% to 65% in the "Required Stable Funding factor" for residential mortgages. That helps banks that rely heavily on wholesale funding - finance other than the deposits provided by you and me - to provide mortgages. It's a sop to Germany and the US, where mortgage providers are particularly dependent on such wholesale funding (and, as chance would have it, is also a great boon for the UK's Lloyds Banking Group).

2) On pages 3 and 4, it says that the implementation of a new leverage ratio - a ratio of gross loans and investments to capital - won't happen till 2018 and hasn't been formally agreed yet. That's a sop to France and its banks with their massive derivative exposures, which would otherwise need to raise vast amounts of expensive new capital.

3) Page 1 signals a victory for Canada, which wanted the capital provided by "minority" partners in banks' subsidiaries to be included in those banks' capital ratios. Canadian banks have a fair number of subsidiaries capitalised in this way.

Some would argue that all this national horse-trading is also leading to a very worrying retreat from plans to put much greater emphasis when measuring the strength of banks on the old-fashioned definition of capital, viz equity capital or shareholders' funds - under pressure from EU countries whose banks have far too little of such basic capital.

However there's a bigger point. Which is that we've probably lost the moment when it was possible to simplify banking regulation and sanitize the banking system.

Instead, regulators, central bankers and governments are patching up complexity. So, whether we like it or not, the rest of us will have to delegate even more responsibility in the coming years to the so-called experts at the FSA and in regulatory bodies around the world to prevent the system toppling over again.

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