A final recommendation is due this week from a commission established to look into the structure of the UK banking industry.

In its interim report it proposed a “ring fencing” of the retail operations to separate and protect them from the investment banking operations. Some suggestions of the time was that the banks should be split into separate legal and stock exchange listed businesses. But the proposal of ring fencing was seen as a compromise.

In the past 2 weeks the financial part of the UK papers has become increasingly cluttered with one sided articles that any attempt to change the UK banking industry will see its demise eg from the Telegraph today. Other watering down of the likely recommendations is that any changes will be from 2019.

The banks do face changes from Basel 3 which will require them to hold more capital and structure it in a way to prevent implosion. That is only a logical change.

I am saddened by the prospect that any recommendations as made this week will be watered down so as to leave the banking industry unreformed. I find it wrong that a financially strong, viable but boring high street presence is used to help raise capital and to reduce the cost of borrowed funds used to help finance a high risk investment banking business. And if the total business fails, then we the taxpayer must finance the total business.

On the other hand the biggest failures eg Northern Rock have nothing to do with investment banking and RBS was brought down by by paying too high a price for another business.

That argument alone is not good enough to leave the status quo unchanged as the banking industry is an international house of cards based upon a less risky high street and a riskier investment banking. Lehmans and AIG were big businesses whose failure threatened the global banking world and required action.

As a taxpayer I see no reason to underwrite an investment banking business and every reason to support a more boring retail banking business.