Banks’ annual reports are ‘unread and unreadable’ because of the glut of information that readers are forced to sift through.

Private equity chief Jon Moulton told MPs that was why the banking crisis had not been spotted earlier.

Moulton identified the transparency and disclosure requirements as a double-edged sword, as key information was buried in the excess of data.

‘It’s all down to the fine print and the mountains of paper that [banks] produce,’ Moulton said.

Moulton added that it was ‘unrealistic’ to think that the FSA in its capacity as regulator would ever be able to handle the complexity of the banking markets.