City: Out insiders

GIVEN that there were 20 international banks in on the secret of Norman Lamont's pounds 7.2bn loan at least two days before it hit the markets on Thursday, it would have been truly extraordinary if something had not leaked out. As it was, the City's wine bars were buzzing with talk on Thursday evening of at least one institution making huge profits on the back of prior information. News that something big was afoot had also leaked into the Frankfurt market.

Even if there were nothing to these rumours, the Bank of England has to investigate. Gilts and derivative instruments are covered by insider dealing legislation, but there are no clear rules for the foreign exchange markets. For that reason, if no other, the Bank has to be seen to be policing its patch with vigour.

If anyone is found to have been breaking confidences, the punishment has to be severe. It must be profoundly depressing for Lord Alexander, chairman of National Westminster, that his bank has inevitably come under suspicion as one of the big four involved in the loan negotiations. After the Blue Arrow affair, he must feel he can do without any further bad publicity, however unfounded.

Jeremy Warner is on holiday.