F1: sponsorship not as good as in the bank.

There are national policies at play: Santander now owns a large slice of the UK financial services market - and last year sponsored the British Grand Prix. It also has a big operation in the USA - so big that Santander and HSBC are regarded by US regulators as a threat to domestic banks and put pressure on them in a variety of subtle ways.

But Santander is, after all, Spanish bank. Indeed, it is a Catalan bank - and Fernando Alonso is a Catalan. Catalonians view themselves as a race apart from the Spanish - in fact the ancient Catalan region was independent and straddled the border with France in the Pyrannees mountains. Some still fight for its independence. It has its own language and its own culture.

So having Alonso in a McLaren with Santander written on it was a Very Good Thing. Until Alonso spit the dummy and joined a French team sponsored by a Dutch bank.

Alonso is still not saying where he will drive next year and his indecision - that has now been going on since the middle of the year with rumours that he was going to BMW next year, and then weekly reports on whose motorhome he was wandering into and out of each race weekend - has rendered much of the decision making in teams moribund. But with teams starting to make announcements anyway, his options are closing.

Santander want to put their logo on Alonso. And they would like to see it on a red car because it is a red and white logo. That means Ferrari. Rumours that have been circulating since July crop up every couple of weeks, although McLaren make it clear that they consider they have a deal for at least 2009. And, they say, it's unlikely that Santander would want to leave one world champion to put their badge on a has-been (actually, they didn't phrase it quite like that but it came down to the same thing.) But that argument doesn't take account of the Catalan connection.

Currently, Ferrari is the only team with substantial tobacco sponsorship even though it can't (overtly) put the adverts on the cars. But as the Marlboro brand is said to be in the top five brand recognition products worldwide, that little white triangle says it all. They need to replace Marlboro's money because their current stance is seen, in some quarters, as outside the spirit of the rules on tobacco advertising. For Ferrari, the problem is to find someone who will come up with anything like the amount they get from Marlboro - bearing in mind that they spend it all, and more.

Alonso has admitted he would like a seat at Ferrari. But there isn't a free seat for at least a year - unless one of the existing drivers is pensioned off. The likelihood of that happening comes down to just one thing: how much money there is in getting Alonso as against how much money it would cost to terminate the contract of one of the incumbent drivers.

But there's another worry about banks' money in the pit lane.

RBS has been throwing money at Formula One - not just in its sponsorship of Williams but also with wall to wall hoardings in Japan and China plus a new TV advertising campaign. The timing could not have been worse as the bank is near collapse. The UK government is bailing out the bank and one question already asked is how spending that money can be justified. Ironically, much of that advertising spend has been in the heartland of Standard Chartered and HSBC (which used to sponsor Jaguar) - Standard Chartered is currently rumoured as a possible buyer of RBS's Asia Pacific business. But Standard Chartered is careful with its sponsorship preferring widespread grass-roots approach to a few high profile and big spending projects. Formula One is unlikely to fit into its pattern of spending.

And it's not just RBS: Dutch financial group ING has seen Fortis, from neighbouring Belgium, have to be rescued not once but twice in recent weeks. Fortis borrowed heavily to beat rivals to the purchase of Dutch bank ABN AMRO. Across Europe, banks - including big ones, have been failing or taking government support. Here's the rub: to keep Fortis afloat, the goverment support came with a condition: the parts of ABN AMRO that it bought have to be sold, and sold fast. The expected buyer is ING.

That will deplete ING's cash pile, or it will have to raise money. Whichever it is, it's bad news for big ticket spending.

ING and Santander both say that they consider that their sponsorship of Formula One has given them coverage that far exceeds the equivalent advertising spend. In the case of ING which advertises incessently on Malaysian satellite channel Astro and other regional broadcasters, that argument doesn't ring entirely true: if the sponsorship is working so well, why interrupt the racing to show an advert of, er, a racing car covered with the same livery?

So the big question is this: if HSBC chose not to continue when times were good, why would banks continue when times are bad? Reaching millions of viewers is one thing - but only if their business is worth having. As recession looms, how many new customers of value can their be?

And in that case, Formula One might find that the men of money are, in some cases at least, men of straw.

==== UPDATE 20 October 2008 01:30 GMT

Within hours of our completing the above story, ING's financial position became clear. It, too, is in difficulty and it Dutch government agreed to pump euro10,000 million into the bank to support it. The bank has announced that the Dutch government will take a stake amounting to 8.5% of the bank which announced on Friday that it had lost euro 500 million. The Dutch government says it's a good investment as the bank's capital position was strong - and its share price had fallen almost 30% on Friday after the news broke. The deal takes 50% of the money the Dutch government had hypothocated for financial sector support.

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See Letters : from Mr Francis Fernandez