Vince Cable is right to lay into the Bankers and their lobbyists. To delay re-structuring is to play with fire. Even if there is some slowing of economic recovery as a consequence, it is far preferable to the economic collapse which would follow doing nothing. The banks are still in a precarious state. A lot of their assets are either worthless or worth less than they think. Neither America, nor the Euro-zone, has any form of political leadership, public consensus or coherent plan to cope with their huge and mounting sovereign debt issues, which are heading by several routes to converge at a general default at some point in the future.
Our Banking system has to be ready to cope with that, like a command bunker in an air raid. It is also essential that those parts of so called banking which are essentially gambling can go bust big time when they come face to face with their follies coming down the track. The government must not buckle or give way. The Tory part of it will be under tremendous pressure to do so. Suddenly the Lib Dems are holding a powerful hand.
The Tories are alleged to be buffeted by the pressures of their lobbyist friends and relatives to the point where they may seek to delay, so as to play electorally safe. They fear either being blamed for slowing the recovery or for delaying the changes. They need to understand that this is not a matter of political calculation. It is a matter of numbers. The numbers are set to show a disaster in the making unless there is action very soon.
The Lib Dems now have an opportunity to restore their damaged credibility by showing, as Vince does, that they understand the numbers and the need. Clegg should make it clear that failure to act upon the recommendations of the Banking Commission will trigger the end of the Coalition. A general election fought on the need to reform the banks, with the Tories backing the bankers, would see the Cameron team routed at the polls and the Tories out of power for a generation.
The Tory high command, if it is indeed wavering, needs to think about that. Meanwhile three cheers for Vince. He needs to keep up the pressure.