Markets nosedived yesterday when Barack Obama set out broad new measures on financial regulation. The most signficant of them is banning deposit-taking banks from proprietary trading that is “unrelated to serving customers”. This activity has generated politically incendiary profits for banks and bonuses for bankers.

The timing was political: the president spoke on the day that Goldman Sachs announced fourth quarter earnings of $4.95bn. Those of a more populist nature than Mr Obama – both on the left and on the right -– will say that he comes late to the game.

Indeed, the White House and the US Treasury resisted the backlash against bankers earlier in 2009 – they opposed the punitive tax proposed in the House of Representatives. Instead of using the control they enjoyed over the banks through the Troubled Asset Relief Program in 2009, the authorities rushed to free banks from the restrictions associated with Tarp.