Disarming a bomb requires isolating the wire that connects the detonator with the explosive. Cut the right wire, and the bomb is safe. Cut a tripwire, and the bomb explodes. But when all the wires in a device are the same colour, the task of the bomb disposal team becomes much harder.

Such is the predicament facing international regulators and legislators in their efforts to set minimum levels for haircuts that banks apply to collateral they receive from securities financing transactions (SFTs)