Cross-border financial institutions pose a quandary for regulators. The health of a European bank, for example, can be affected by what its New York office is up to – information that resides mainly in the US. Americans doing business with the US office, meanwhile, rely on the standing of its European parent, which cannot easily be scrutinised by US regulators.

Since authorities in both places are partially sighted, the obvious solution is to work together. But their interests may not coincide. Since each regulator cares most about looking after its home country, neither may trust the other to oversee an institution that matters to both. The problem is exacerbated if regulators are under political pressure to play down problems that may be real and serious.

The US proposes to solve the problem with the blunderbuss of extraterritorial jurisdiction. American authorities want to be able to demand the internal records of the European parents of registered US dealers – among them, large banks such as Barclays, Deutsche Bank and Société Générale.