The deadline for banks to submit their plans to ring-fence their retail operations (current accounts, small business banking etc) is looming, and already there are signs of starkly differing approaches. Barclays and HSBC would like to hold as little as possible within their ring fences because they have large investment banking operations and globally diverse businesses.
For Lloyds, and to a lesser extent Royal Bank of Scotland, however, the advantage is in holding as much as possible within the fence because they are largely UK focused retail banks. So it’s cheaper that way.
Not a problem, says the Bank of England, we’re not going to adopt a one-size-fits-all approach. That might appear to be sensible on the face of it. Trying to ram big, complex, multifaceted, square-ish pegs into round holes could be a recipe for disaster.
But just how bendy should the ring fence be? Given that the overall costs of the project could hit £4.4bn, there is likely to be quite a bit of lobbying and horse trading about that as the Bank finalises the rules.
Just the sort of lobbying and horse-trading that worried Andrew Tyrie and his Parliamentary Commission on Banking Standards when they demanded that the ring fence be electrified by adopting the threat of breaking up the cheaters.
However, if the ring fence is going to be bendy, is Mr Tyrie’s threat going to be an empty one? We might be about to find out.