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There is widespread agreement that reform of British banking is essential and overdue and that it should start with the separation of so-called high street business from the kind of speculative, "casino" adventures that have landed them in so much trouble recently. The report by Sir John Vickers, which is published today, is welcome, therefore, in calling for the two activities to be ring-fenced from one another.

Preferably, the report would have recommended the total separation of the two activities. This is because ring-fencing still leaves open the possibility of banks stealthily dismantling the internal demarcation over time.

Given that, ring-fencing is greatly preferable to what we have now: banks so big that they know they cannot be allowed to fail lest they pull down millions of small savers with them. The current safety net that these behemoths enjoy has been a disaster for them as well as us, fostering a culture of complacency and recklessness. What it has meant in practice is that the banks reap big profits and liberally hand out bonuses when the times are good, confident that when times are bad the taxpayer will step in and bail them out. Heads they win, tails taxpayers lose.

The reaction of the Coalition Government to the report will be the key test – not in terms of whether Sir John's proposals are bathed in warm words of welcome but whether they are acted on with speed. The response of the Chancellor, George Osborne, will be crucial. He is known to be less enthusiastic about demarcation within the banks than the Business Secretary, Vince Cable.

Those who don't want real change will be careful to make the right-sounding pleasantries about the report while calling for enactment of its recommendations to be pushed back for a few years. The excuse will be that the banks need more time to adjust.

The Government should present a united front and not heed this predictable clamour from the banks and their friends. It should make it clear that the report's main proposals will be put into law within the lifetime of this parliament. Anything less than wholehearted commitment will show that the Chancellor, in particular, is not serious about banking reform.