I remember the pre-Northern Rock crisis days when the only thing we worried about was rip-off charges. Three years ago, as tens of thousands of consumers started suing their banks for the return of previously imposed penalties, it felt like an earthquake was rippling through the banking industry.
If only we had known that this debate – which became quite poisonous due to the macho posturing of the banks in treating both claims and an official investigation with contempt – was little more than a warm-up act before the credit crunch and recession engulfed us.
But last Thursday, the charges row sparked back into life in the Court of Appeal when the banks lost their latest attempt to stop the Office of Fair Trading (OFT) ruling on whether the fees are fair or unfair. At once, emails from triumphant consumer groups started flying into my inbox saying how the banks had to refund the charges now.
I'm afraid, though, that their optimism is premature. We all know the world is very different now and many banks' balance sheets are in a terrible mess. The OFT and the Financial Services Authority – which has frozen all consumer claims – know that draining resources from the banks at this time will only create more market uncertainty and be viewed with alarm by Whitehall. Meanwhile, the marketing departments of the big banks have been busy confusing the issue by introducing all sorts of caveats that will make their fees seem fairer without, of course, damaging the income stream too much.
The OFT is looking at all this and needs to hold its nerve. We need a cap on charges similar to that imposed on credit cards a few years ago. It doesn't have to be pennies, as some consumer campaigners are demanding; after all, it isn't right to use other people's money without their permission, which is what an unauthorised overdraft comes to. However, the fees must be fair and proportionate and the evil of charges that trigger further charges has to stop.
Hard to swallow
You have to feel for shareholders in the old Lloyds TSB. Their bank, although exposed to some toxic debt, was still able to turn a profit last year. However, that has been dwarfed by the staggering losses at HBOS, the dead man walking into whose arms the Lloyds investors were frog-marched. I can't help but remember a comment made to me by a leading Spanish banker when the Lloyds-HBOS merger was announced. He said it was like "a snake swallowing a poisoned bull".
Pensions off limits
On the subject of bull, we have Sir Fred "the shred" Goodwin's pension. Of course it is odious – the size of it and the circumstances – but I don't agree with those who suggest that legislation should be introduced to allow the Government to confiscate a private individual's pension. Regardless of how greedy or incompetent that person might have been, do we really want a legal precedent giving a government such powers?
The problem clearly lies in the system of executive pay and benefits, and the gap between boardroom and shop floor that has been allowed to grow from a gulf into a giant chasm, over the past 10 years in particular. Let Sir Fred (pictured) have his pension; his reputation is toast.