Populist yes, but oppressive banking regs could be putting the cart before the horse according to Sir John Gieve, the former Deputy Governor of the Bank of England. Basically if banks feel they are under fire from regulators they will batten down the hatches at a time when the economy is desperate for new lending.

Telegraph: “To set economic policy going forward what we need to do first is tighten up fiscal policy. Then, second, to look at interest rates. And then third, to look at regulation,” he said. “To be effective, economic policy needs to be set in that order. But at the moment, the risk is that we could be doing exactly the reverse and wrong order. That means banks will be deleveraging in anticipation of regulation just at a time when we need them to be in growth.”

More>

As for the Lib Dems, he thinks they would likely demand a massive hike in bank taxes for any party wanting their support (that would be on top of all the other taxes aimed at City high fliers).

Little wonder the thought of a hung parliament makes the City squeamish.

(Photo: Norbert Schiller)