Last Wednesday night, David Clark, a London-based banker, received a nasty shock. Reports from Washington suggested the US government would soon impose restrictive new regulation on the derivatives world – a move Mr Clark believes could severely damage financial business in London and New York.

He duly prepared a furious statement on behalf of the Wholesale Market Brokers' Association, a lobbying group he leads. But when, a few hours later, he saw the proposals from Tim Geithner, US Treasury secretary, Mr Clark had second thoughts. “What Geithner has written may not be so bad,” he says, adding there is now “uncertainty” about what will happen next.

No wonder. Until recently, the technical detail of derivatives excited only financial geeks. Now it is turning into a political hot potato with potentially big implications for bank profits. After the first wave of policy reforms unleashed by the administration of Barack Obama in response to the financial crisis, focused on short-term crisis measures, such as the “stress tests” of the health of banks, the next frontier is a fight about how the financial industry is structured – and run.