Mr Cruickshank blamed the "regulatory contract" for preventing his recommendations being implemented in full. He said civil servants in the Treasury eroded Mr Brown's commitment to PayCom.

Five years on, Mr Cruickshank said that if a review was started now, "all you'd need to do is change the date". He acknowledged that the so-called regulatory contract had a purpose, particularly before 1992 when banks were suffering losses after being encouraged to lend to small businesses.

"Post-92 we've had a run of non-boom-and-bust times, growth has been higher in the economy, interest rates lower and so the banks have had a run of 13 years in economic circumstances which we used to experience only two years out of five. But the regulatory contract hasn't changed," he said.

"Logically, the government should be getting harder but it hasn't responded to better economic circumstances," he said.

But he is opposed to a windfall tax on profits. "I've concluded five years later that PayCom and the FSA competition objective, along with the new merger rules in place, probably represents the shift that needs to take place."

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