Outlook What we won't get in next week's Budget is anything new on theregulation of the banking sector. Recognising what a toxic topic this would be, particularly given the LibDems' public pronouncements about bankers prior to the election, Mr Osborne very wisely opted to kick reform into the long grass by appointing the Independent Banking Commission. Until Sir John Vickers' inquiry comes up with proposals later this year, Mr Osborne doesn't have to address this issue in any meaningful way.
Thankfully, other influential figures are not so happy to sit on their hands. The speech given yesterday by Lord Turner, the chairman of the Financial Services Authority, was unusually long but is easily summarised. "Basel III didn't go far enough, we haven't resolved the 'too big to fail' issue, and shadow banking remains a serious worry," he might have said.
There is some speculation Lord Turner has his eye on the Governorship of the Bank of England, a post due to fall vacant in two years' time when Mervyn King's second term of office is due to end. They are certainly peas in a pod on this topic: Lord Turner's speech repeated the sentiments last week expressed by Mr King in an interview in which he was strongly critical of the banking sector.
Several members of the Bank of England's court have since warned they feel uncomfortable with this sort of political intervention. But the truth is that if Mr King and Lord Turner did not go on making the case for more substantive banking reforms, the argument might easily slip off the radar altogether. That would clearly suit the Chancellor, who has made no secret of his desire to move on.
The banks too believe their goal of putting a stop to the reform process is now achievable. You can see that when Barclays boss Bob Diamond talks about the need to put remorse behind him or when HSBC chief executive Stuart Gulliver drops hints, yet again, that his bank may quit the UK if it judges the threat from tax or regulation to be too great.
Lord Turner's warning is a stark one: it is that fundamental flaws in our regulation of the banking sector have yet to be addressed. But if interested parties get their way, they never will be.