At last the public debate about the causes and consequences of the credit crunch is moving beyond attribution of blame to a more complex discussion of the steps needed to prevent it happening again.

Of course it is necessary to put right what went wrong in the regulatory framework in the UK and, at the very least, in the other major financial centres of the world. But it is essential that the authorities strike a balance between the desire for financial stability and the need to finance economies out of the recession.

Banks in the UK, for instance, are holding twice as much capital as they did before the credit crunch. If new requirements are piled on too high, the banks simply will not be able to support the sort of lending that business and individuals require.

There is a strongly held view within the British Bankers’ Association that more attention needs to be paid to the fundamental question: what is the right amount of capital in the system? Therefore we need to know far more about how much additional regulatory changes will cost, what the impact will be and then decide how to phase them in so growth is not constrained.

The broad-based banks that incorporate a range of essential banking functions for people and businesses provide another example of where regulators need to strike a balance. Broad-based banks exist because globalisation demands them and customers want them.

Multinational companies require banks that can assist them in multiple jurisdictions with different laws, different listing rules, different finance requirements and more. So to curtail the activities of British banks, while our international competitors can continue to provide all these services, would be a very poor decision for the UK economy: these services underpin the requirements of their individual customers and are vital for corporate Britain.

This is why the banking industry is seeking to move the debate forward – to build an appreciation among policymakers of how many changes our banking industry will be required to undergo and what the subsequent costs will be of doing business, owing to increases in capital, in liquidity and in other areas that will not actually be decided in the UK but in Europe.

That European agenda is long, with the European Commission having announced that two further packages of Capital Requirements Directive amendments are to be published; they are expected this summer and this autumn. The June amendments will link capital to pay, put capital against resecuritisations and address the treatment of capital in the trading book.

Meanwhile, in the autumn the Commission will set out the amendments it is proposing on “dynamic buffering” (essentially building up capital reserves in the good times), the definition of capital, the removal of national discretions and options, liquidity and leverage ratios.

This is a long list and, if addressed with care, balance and sensitivity, these extra requirements have the ability to bring the right result of greater stability, not restricting or making unduly expensive the broad range of normal business activities. The industry also recognises that changes have to be made, and it is absolutely engaged in the discussions of what, where, when and how.

But to get all this right requires close contact and engagement at all levels with the policymakers in the UK, EU and beyond. We have a mission to explain the hidden costs and likely consequences of all of these changes. It is imperative that the UK negotiates well and in every way, from the top of the industry to the bottom and to the authorities.

Having the financial crisis is bad enough. Straitjacketing one of the UK’s biggest industries as it works to restore prosperity to its customers makes a bad situation worse.

Angela Knight is the chief executive of the British Bankers’ Association

The way forward

“We should learn from the banks that have survived but ask them to remember what happened in the 1980s when good businesses were lost. Certain parts of the country will not use some banks as a result. Anything we can do to stop the destruction of our industrial base will be helpful.” Ian Livingston, BT chief executive

“It is a common fact that people make bad regulations in difficult times and it is possible to regulate all returns out of this industry if you try hard enough.” David Mayhew, chairman, J P Morgan Cazenove

“People in the regulatory system and in the institutions should be prepared to go against consensus views on risk dispersal and take unpopular decisions.” David Wighton, business editor, The Times