One unintended consequence of the current round of reform could come to the banks’ rescue. Banks have long argued against punitive capital requirements on the basis that they will restrict their ability to lend.

One likely, but little discussed, consequence of higher capital requirements is that companies will turn to the capital markets for their financing needs. In other words, the reforms will disintermediate lending banks. Investment banks that can help clients raise money on the capital markets should benefit.

We have seen this before. After the banking crises of the 1980s and early 1990s, the markets saw an explosion in new forms of capital raising as banks in the US, Europe and Japan were forced to rein in their lending. This is reflected in data kindly crunched for Financial News by Citigroup: bond issuance overtook net loan issuance in the second half of 1990 and has never looked back.