Such a deal would mirror the 2003 deal pushed through by New York State attorney general Eliot Spitzer, who got banks to pay $1.4 billion (£891.8 million) to settle allegations that they misled investors with “buy” recommendations on shares they privately expected to collapse.

Although such talks are said to be at an early stage, it is likely that a deal this time would involve a much higher amount given public fury at the banks.’