Business View: German banks are going to be bratwurst, but RBS doesn't have the stomach

It takes a brave man to call Fred Goodwin a coward, at least to his face. But from behind the protection of a computer screen, I'm going to do just that.

Why? Because the Royal Bank of Scotland chief executive, who has turned what one US commentator called a "regional bank" into a powerhouse of world finance, effectively ruled himself out of the great game that is likely to take place this year: the carving up of German banking.

One of Germany's big four banks, Commerzbank put itself up for sale on Wednesday. Announcing a record €2.3bn (£1.5bn) loss, Commerz's chief executive, Klaus-Peter Müller, said the group was open to a merger or a takeover from inside, or outside Germany. If that's not a "come and get me", I've not read one.

And Herr Müller is not alone. Another big German bank, HVB, will announce the results of a "strategic review" next month. That review won't say HVB should sell off its peripheral investments, because it's already done that. And if it says it wants to pursue a merger with a German rival, then you might argue it's already failed to do that. So it could well put itself on the block too.

What's more, Deutsche Bank has just admitted it was in talks to be taken over by Citigroup. Given the American giant is five times Deutsche's size, this could in no way be presented as a merger of equals. It was an admission of defeat.

So with the equivalent of Barclays, Lloyds TSB and HBOS on sale in Germany, should the UK's banks get involved? Others in Europe are certainly interested. Rijkman Groenink, the chairman of ABN Amro, said recently that European banks would have to accelerate their merger plans or risk losing assets to US groups. And France's most outward-looking bank, BNP Paribas, is running the ruler over its neighbour's financial sector as we speak.

Yet what of our banks? Lloyds TSB, which enjoyed a long smooch in the corner with Deutsche 18 months ago that didn't lead anywhere, has now ruled itself out of the running for a European merger. Barclays might be tempted by a German deal, but seems far more interested in doing something in the US at the moment, having taken a long hard look at both Providian and GreenPoint. HSBC similarly seems disinterested in Europe.

And Fred Goodwin said last Thursday that the time was not right for anything but fill-in deals in Europe. Given the financial strength of RBS, throwing off £2.5bn a year, this cannot be because it can't afford to get involved. And it cannot be because there aren't the opportunities.

It can only be because Mr Goodwin is afraid of the potential nasties lurking within the German banks. This might be commendable caution. But, if you believe that the German economy will inevitably recover, and that recovery might not be too far off, this might be more correctly interpreted as cowardice.

Where do nice banks finish?

After all the hoo-ha about RBS's record profits, don't expect a similar protest when its Edinburgh neighbour, HBOS, reports on Wednesday. It is trying to present itself as the nice guy of the high street, standing up against the big four bullies. So it is offering some astonishing deals.

Among them are a credit card with 0 per cent interest for nine months and a savings account offering 6 per cent. Now if you had £3,000 of credit card debts and you had enough to pay them off, you would be wise to hold your horses, get this new credit card, transfer your balance to it and put the £3,000 in the Halifax savings account for nine months.

This would save you £135. Not a fortune. But if lots of people do it, HBOS's figures won't look too clever at the end of this year.

Reed threatened with library fines

Reed Elsevier gave a stout defence of its scientific publishing business last week, arguing that only a tiny fraction of academics are getting journals and articles via "open access", whereby they don't have to pay the massive fees Reed charges. But what Reed ignores is how universities and libraries might use the threat of open access to beat it down.

A recent survey by Goldman Sachs found that nearly a quarter of librarians planned to cancel or reduce subscriptions to Reed's Science Direct and another third were demanding price cuts. Not all of these will carry through with the threats, but it's enough to ensure Reed will have to keep its prices down for some time.

j.nisse@independent.co.uk