Sitting in the audience at the launch of the FIA Formula 2 Championship a couple of weeks back I could not help but think that Jonathan Palmer's case for this new formula was both prescient and ironic given that it took place in the Williams Conference Centre.

The FIA's concept of an ultra low-cost formula for aspiring grand prix drivers, weighing in with a budget of £195,000 for a 16 race series held across eight weekends at some superb venues in Europe, could not have come at a more fortuitous time.

Low cost is not a term often associated with motor sport in any credible way. Being slightly biased I feel one of the exceptions is A1GP which provides entrants with a global series (or world championship, but of course they cannot use that term) for exciting open wheel racers costing 2.5% of the budget required to compete with any reasonable chance of success in the FIA Formula One World Championship. And in FIA F2 we really do have some innovative thinking from the powers that be.

I say the launch at Williams was ironic because, listening to Palmer extol the virtues of low-cost F2, I could not help but reflect on the fact that Sir Frank Williams must wish Formula One would also attend to the matter of financial extravagance and bring in emergency measures enabling the teams to respond to the dramatic events unfolding in the banking sector and stock markets globally. And not by 2010, since everyone knows that the real impact of the financial crisis will hit us like a tsunami in the coming months.

Williams, a privateer team, appears to be one of those most obviously exposed to the 'credit crunch' - something that until now F1 people may have thought was a breakfast cereal, but which could have dire consequences for the sport.

Sponsored by the Royal Bank of Scotland, one of the UK banks hardest hit by the banking crisis of recent weeks, I cannot but imagine that the financial headlines of the last few days must have generated some considerable concern in the corridors of Sir Frank's headquarters in Grove, Oxfordshire.

That the bank's share price has collapsed 80% in the last year is one thing, but the British's government's acquisition of 63% of the business and the enforced resignation of CEO Sir Fred Goodwin and retirement of Chairman Sir Tom McKillop will have important ramifications.

Sir Fred likes F1 and apparently drove the Williams deal with the advice and support of Sir Jackie Stewart. I know this first hand because, in 2004, I sat in front of a senior executive of RBS and presented the case for Formula One. He told me, flatly and in no uncertain terms, that 'Bernie Ecclestone's TV figures don't add up', that 'F1 is not for us' and 'sponsorship…(of F1)…will not happen while I am here'.
A few months later, RBS announced its deal with Williams. To quote RBS's own advertising campaign, clearly Sir Fred decided to 'Make it Happen' and no one was going to stop it.

As a result I can only feel that given Sir Fred's departure, the state of RBS's business and arrival of three British government appointed directors to the board, the prospect of RBS continuing in Formula One will logically come under threat. Contract or no contract, spending tens of millions of dollars on motor racing is unlikely to be high on the agenda when the management sits down and considers how to trim costs, added to which RBS will wish to distance itself from anything that its hard pressed customers and shareholders may regard as public extravagance.

As if that were not enough, Williams is furthermore backed by companies belonging to the Baugur Group, one of Iceland's leading businesses which owns significant retail business in the UK. And Iceland, as we now know, is a country which last week teetered on the bring of national bankruptcy.