The banks - with the notable exception of the publicly-owned Lloyds - are as happy as butchers' dogs this morning at Sir John Vickers' recommendations. No forced subsidiarisation, no 'firewall'; they can still shift money about between retail and buccaneer banking as they wish. However, lending to consumers, for mortgages and to small business will dry up and bank charges will increase as Vickers imposes an increased capital requirement on retail activities. Bankers are therefore set for another bumper bonus year in 2011 as the British public pays the price.
Banking will therefore remain an oligopoly and continue to enjoy supernormal profits at the expense of the British economy. Yet another reminder that the behemoth corporations and central Statism are hand in glove. If this government were serious about Localism, about devolving power, they could invest just 10% of the cost of Vickers' boost to the banks in promoting mutuals, friendly and provident societies and credit unions and create real banking competition on the High Street. What a wasted chance.