Of course, there won't be as much easy money around to pay bonuses with...

But actually, the problem is convincing the central bank to do this. The retail banks can be bought simply by paying the policy rate on regulatory reserves as well as excess reserves. Do they deserve that subsidy? Arguably yes, since regulatory reserves arise when people deposit money (or keep borrowed money) in the bank. So the difference between the support rate and the retail rate would be the government subsidy for banks who manage the payment clearing infrastructure.

- Jake

Friends come and go. Enemies accumulate.

"There was a period of remorse and apology; that period needs to be over. We need our banks willing to take risks, to be confident and to work with the private sector in the UK to create jobs and improve economic growth," he said at a hearing examining the retail banking sector.

Repairing the financial sector swiftly to find the path to recovery

There is a strong correlation between healthy credit expansion and sustained economic development. Balance sheet repair in the banking sector is essential to improve cost efficiency, restore competitiveness and return to normal lending. A swift exit from sizable public support to banks will remove possible distortions to competition in the financial industry. Furthermore, confidence in the banking sector is a prerequisite for maintaining financial stability. This is now being corrected through a more robust EU regulatory framework, a future permanent "European Stability Mechanism" to be established by 2013 to safeguard the financial stability of the euro area as whole, as well as tougher capital requirements on banks (Basel III agreement).