James Moore: The price is right – but not for British taxpayers

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There's no doubt that an injection of competition into Britain's banking market is desperately needed.

The Government is hoping three "new" banks will provide it. Of them, it will sell one (Northern Rock), while banks it part-owns (Lloyds and Royal Bank of Scotland) will sell the others.

But finding buyers to provide that competition (and make a return for the taxpayer) might not prove to be quite as easy as it looks at first glance.

Santander is a confirmed candidate and could realistically create a "fifth force" in British banking, given that it already has a substantial UK business in place.

But the plans to partially float that business to help fund a deal to buy Williams & Glyn's from RBS suggests that it is not exactly flush with capital. What banks are?

And as John Hitchins, from PwC, says, Britain is not an attractive market to enter for banks right now, because the economic prospects over the next few years look gloomy at best.

There are also lots of European assets coming up for grabs in countries with much better prospects. Overseas players might be inclined to look at some of these before considering Britain.

Of course, there's always Virgin, but it needs backers. National Australia Bank is already here, but it's not clear that it wants to stay. There's Tesco, which has capital, and ambitions. But does the supermarket really need, or want, the substantial network of bank branches that all of the three banks with "for sale" signs over them come with?

These three banks will eventually find buyers, one way or another. Viable businesses always do, if the price is right. And with only a limited number of possible bidders, the price will be right for someone. Just not, sadly, the taxpayer.