In an unprecedented move, the Federation of Small Businesses (FSB) has urged the Financial Conduct Authority (FCA) to intervene over what it describes as “harsh” banking practices that it insists are forcing entrepreneurs to put their homes at risk unnecessarily.

The lobby group has filed a “super-complaint” – the first to be made to the FCA since it was included in the regime in 2012 – over “banks that excessively demand personal guarantees for business loans”. The FCA said it would consider the complaint carefully and respond, which in all likelihood – given the watchdog’s risible track record – means it will spend a lifetime chewing over the matter and still do nothing about it.

Truly, few national institutions move with the lethargy of the country’s top financial regulator.

The FSB should be commended for raising the alarm on such practices. As its chairman Martin McTague acknowledges, such guarantees are “perfectly reasonable” where a business doesn’t have many physical assets of its own. Indeed, this is perfectly normal practice.

Tales abound of ambitious entrepreneurs putting their houses up as collateral, or re-mortgaging their homes so they can get a business idea off the ground, and it’s not at all unusual for banks to demand other types of personal guarantees from the directors of fledgling companies before they will lend to them.

But as McTague quite rightly points out, “proportionality” is desperately needed, and never more so than during these straightened times. As the financial crash demonstrated – whenever there’s a crisis, the banks are far too quick to panic and toughen their stance with borrowers, many of whom will be long standing customers that have never fallen behind on a debt payment.