Analysts at JPMorgan have calculated that if the full burden of regulatory and political initiatives to crack down on banks’ risks is implemented, it would cut the average return on equity from a projected 13.3% to 5.4%.

The conclusion is a stark illustration of what might happen if all of the proposals mooted by governments in the US, UK and France were put into effect globally at the same time as the overhaul of capital and liquidity standards being engineered by regulators on the Basel Committee on Banking Supervision.

The authors concede that such an extreme scenario, which would also entail the world’s 16 leading banks (excluding JPMorgan itself) having to raise an estimated $221bn, or $14bn apiece on average, is unlikely to occur in practice.

When you buy a dishwasher, you know it probably won't explode. When you buy aspirin, you can figure out the side effects without an advanced degree. When you buy zucchini, you can feel confident it won't be toxic. And when you buy movie tickets, you can presume the terms of your purchase won't change after you leave the window.

But when it comes to financial products like mortgages and credit cards, you can't be sure of any of those things. That's the basic case for a Consumer Financial Protection Agency (CFPA), the centerpiece of President Obama's push to reform financial regulation.

The Bank of England dashed the hopes of mortgage lenders last week when it firmly closed the door on an extension of its Special Liquidity Scheme through which it provided term funding for mortgage bonds.

Some £287bn of collateral was posted with the Bank during the SLS’s brief life in exchange for £185bn of funding with a term of up to three years. The vast majority of this is believed to comprise mortgage backed securities and covered bonds — some £242bn of which was issued but not placed with investors while the SLS window was open.

So it is understandable that the Council of Mortgage Lenders would respond to the closure with warnings of a huge funding gap, backed up this week by Moody’s.

Experts fear that a new wave of foreclosures will hit this year as prolonged unemployment makes it difficult for millions of homeowners to pay their mortgages — and many of them aren't likely to get much help from a federal program aimed at keeping them in their houses.

Banks participating in the Home Affordable Modification Program, announced a year ago this week by President Obama, have been slow to turn temporarily reduced mortgage payments into permanent ones.

"The overarching sense is that the mortgage modification process has not worked that well," said Bert Ely, an independent banking consultant.

Yields on Fannie Mae and Freddie Mac mortgage securities that guide U.S. home-loan rates fell to the lowest relative to Treasuries in at least 25 years before retracing the move.

The difference between yields on Washington-based Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds and 10- year Treasuries were unchanged at about 0.65 percentage point as of 5 p.m. in New York, after earlier falling to 0.63 percentage point to match the smallest spread since at least 1984…

The fund will pay investors of the Colonial First State Mortgage Income Fund at least 10 percent of their accounts in late March while further payments will be made as cash becomes available from mortgage repayments, Colonial said late on Tuesday.

The Colonial First State Mortgage Income Fund, which primarily invests in commercial mortgages, was closed to withdrawals in October 2008, other than for periods when redemptions were allowed, and it may take at least four years to wind up the fund.