Banks must be subjected to robust regulation that makes them 'a shock absorber' in times of economic stress 'rather than a source of instability', Lord Turner, the Financial Services Authority chairman, said yesterday.

Describing the financial crisis as 'the worst for 70 years [and] in some ways, in its international reach and impact, the worst in the entire history of modern capitalism', he added: 'A major objective must be to return banking to its basic functions – providing vital services of real value to the real economy.'

Daily Telegraph