In a speech to the Association of British Insurers (ABI) Cable rebuffed claims that British banks are “uninvestable” but said investors’ expectations of returns was unworkable.

The Telegraph reports he said: “There has been an assumption of returns that is hopelessly unrealistic in what are essentially utilities. There needs to be a realistic appraisal of what banks are and what they do.”

Cable blamed “bank bosses like Bob Diamond” for promising inflated returns and raising expectations.

He also admitted there could be a conflict between what investors have expected and government policies. But he insisted regulatory changes had been made to make banks safer.