James Moore: It's right that Osborne is being taken to task over ring-fencing at banks

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Outlook If George Osborne was hoping that the Parliamentary Commission on Banking Standards would concentrate its energies on telling off bankers for being bad, he's been given a rude awakening. Yesterday it was the Chancellor who was getting scolded, while the commission also blew a raspberry at critics who said it would lack teeth as a result of two of the more vocal members of the Treasury Select Committee being left off the list of members.

The ire of those members who are on the commission was provoked after an irritated Mr Osborne questioned their scrutiny of plans to ring-fence "retail" and small business banking, proposed by Sir John Vickers and watered down by Mr Osborne.

They've done this by calling on people like Paul Volcker, the former United States Federal Reserve chief whose reforms to the US banking industry have gone down the route of banning institutions classified as banks from placing bets in the financial casino as opposed to ring-fencing retail.

Look, Mr Osborne told the committee, a consensus has been reached so you shouldn't jolly well be spending all your time on undoing it. Why not look at the way standards are enforced by other professions like doctors and see if, you know, bankers could have something similar.

One thing the financial industry surely doesn't need is a sort of banking BMA. It already has regulators who are scratching their heads because they'd quite like to know how the planned ring fence they are charged with policing is actually supposed to work.

Unfortunately that will all be left to secondary legislation, which hasn't yet been published.

In its absence the commission has drilled down into the proposals to see if they hold water in light of the fact that we have only recently discovered just how low the banking industry had stooped in the run-up to the financial crisis. With, for example, the Libor scandal, which may yet be followed by parade of similarly grubby affairs. Based on that it doesn't seem like such a bad idea that the ring fence is tested. And for the commission to come up with its own proposals for how legislation might best be framed for it to protect the taxpayer from having to bail out another Royal Bank of Scotland.

After all, as the commission's chairman Andrew Tyrie pointed out, just because there is a consensus doesn't mean it is right. It wasn't so very long ago that the consensus held that banks would never stop lending to one another and that securities backed by subprime mortgages were a wizard idea.