US regulators have criticised the British response to the escalating international Libor-rigging scandal, labelling it another example of a "made-in-London" financial crisis.
I have obtained a note produced in the last few days by Pelorus Research, a highly-regarded financial research firm, which discloses comments made to its staff by officials at the US Treasury, the US Federal Reserve and the Commodity Futures Trading Commission (CFTC) that amount to a vote of no confidence in the City's ability to regulate global trading activities.
The comments - assuming they have been accurately recorded by Pelorus - are a devastating indictment of the UK's regulatory framework and threaten to undermine relations between Britain and the US just as the Bank of England prepares to become one of the world's most powerful bank regulators.
Pelorus quotes a US Fed official saying that "the two great disappointments [during the crisis] were the banking culture on display at Barclays and the slow reaction time of the UK authorities. They had to be continually prodded by us."
The CFTC was equally scathing, according to Pelorus, saying that the British Bankers' Association and the Financial Services Authority "have been particularly egregious in turning a blind eye".
Sir Mervyn King, the Bank of England Governor, is giving evidence to MPs on the Treasury Select Committee about the Libor scandal this morning.
The Pelorus note, which is marked 'Highly confidential: not for distribution', also quotes officials as saying that Libor was "a huge strike against the London financial market".
What's clear from these remarks is that US regulators have all but lost confidence in their London counterparts. It follows recent remarks over the crisis at JP Morgan, in which London-based traders lost billions of dollars for the bank, prompting the CFTC chairman, Gary Gensler, to attack UK regulation.