A shambles, and no idea if it will work

Last year we fell out of our collective chairs when the Government said it was using £37billion of our money to rescue the banks. Today it chucks in another £39.2bn, and we barely bat an eye. That may be because we knew back then that it probably wouldn’t be enough, but the numbers still have the capacity to horrify.

What is equally forehead-slapping is the way the Government has gone about it. A few months ago when the Tories suggested smaller banks, Stephen Timms accused them of being ‘on the wrong side of the argument’. What do we get today? Smaller banks. A few weeks ago when George Osborne suggested big cash bonuses should go, Liam Byrne said banning bonuses was ‘unworkable’. Today? Lloyds and RBS have to restrict bonuses.

There are optimistic glimmers in all this – the prospect of more competition, eventually; signs that Lloyds is getting out of its hole – but the picture remains dreadful for RBS, and running through it all is a sense that the Government is busking it. What odds that more cash will be needed?