There is a real danger moreover of the SIB evolving into an overly bureaucratic and authoritarian regulatory monster

There is a real danger, moreover, of the SIB evolving into an overly bureaucratic and authoritarian regulatory monster. That would clearly be a very bad thing for the City, significantly undermining its present attractions to international capital and banking. The function of good regulation, it is often said, is to keep the horses under control while not in any way interfering in the race. Certainly the traditionally “light” touch of City regulators has been as much a part of the Square Mile’s success as its failings.Central to this approach is the way the Bank of England exerts informal authority in the City through its supervisory arm. While this may be a peculiarly British way which leaves much to be desired, it none the less seems to work. The Chancellor said that reform of City regulation was a longer-term goal after a period of debate and due consultation Then all of a sudden it becomes immediate.

Is Mr George right to be concerned, or is this just pique at being stripped of half his empire?There is a quite respectable case for arguing that, far from strengthening City regulation, the reforms will actually only lessen the Bank’s authority and lead to an inferior form of banking supervision. Well actually not very much seems to be the answer.Eddie George, Governor of the Bank of England, is plainly more upset about the whole thing than we were led to believe on the first night. If he had been told two weeks ago when operational independence was announced that the quid pro quo was losing supervision, all well and good But he wasn’t. He still worries about whether this is the right thing to do and is understandably peeved about not being consulted on the speed of it all. It is what he did at the Spanish Grand Prix in 1982 after falling out with the powers that then ran the sport.

So he should know better than most that playing hard ball usually works.The Bank is better off without this taskFirst impressions are usually the most lasting, but the more considered second view is often the more reliable. So after the rave first-night reviews of Gordon Brown’s latest City drama, Death on Throgmorton St, is there any cause now for a little revisionism. But could he really float without the likes of Villeneuve, Frentzen, Coulthard and Hakkinen in tow? The constructors’ ultimate weapon is to withdraw their teams Mr Ecclestone is familiar with such tactics. In time-honoured fashion, the sub-underwriting of the offer is being distributed as widely as possible. The same tactics were employed by BSkyB and the water and electricity companies to ensure that their flotations were greeted with maximum enthusiasm in the broking community.Mr Ecclestone could call the constructors’ bluff and press ahead regardless.

How could he publish a prospectus – other than one with a health warning on every page – without the agreement of the most important names in the sport?Mind you, he is doing his best to stifle dissent in the City. It will, by all accounts, be difficult to move at this weekend’s Spanish Grand Prix without bumping into an analyst or fund manager there at Formula One’s expense. Some of this may be just bravado, but that doesn’t make it any less of a threat to the float.Even if Mr Ecclestone proves himself as sprightly as Jacques Villeneuve between now and Silverstone, it is hard to see how he can meet his timetable. In all, we were told, the flotation would reach the chequered flag by the time of the British Grand Prix at Silverstone in July.
All this is news, it now transpires, to the likes of Williams and McLaren, who have led the rearguard action to stop Mr Ecclestone cashing in his chips without a fairer distribution of spoils to those who actually make this particular merry-go-round rotate – the racing teams themselves.It now appears that they are holding out for a stake of nearer 20 per cent and still haggling over the details of the Concorde Agreement, which governs how the television revenues are shared out. The City had been led to believe that all final obstacles to the float had been overcome. Mr Ecclestone had patched up his row with the leading Grand Prix teams, they had settled for a 10 per cent stake in the quoted company and there was even talk of a prospectus being published by the end of this week.

The flotation of Bernie Ecclestone’s Formula One may not be quite as close to the starting grid as his financial advisers Salomon Brothers and his fans in the sport and the Press have been telling everyone. Worldwide coatings and sealants, still by far the biggest product division, is suffering from the cheaper dollar on translation, but Courtaulds’ strong position in niche areas like solvent- free powder coatings and aircraft sealants is reaping good underlying growth.Viscose remains the dog of the portfolio, producing a small loss last year. It will not show real improvement until the industry cuts more capacity.But assuming Capel’s forecast of pounds 150m is realised this year, the shares, on a forward p/e of 14, look reasonable value.. That augurs well for the third production line due on stream in Grimsby later this year and the next Tencel plant, due to be built in Korea, Indonesia or Singapore.Meanwhile, the group’s long-term plan to build sales of other products in the Far East is also starting to pay off, with a 45 per cent jump in profits to pounds 16m from the area. The group is coy about how profitable it is, but David Ingles at James Capel reckons it could have chipped in pounds 14m on just under pounds 100m sales last year.