Those of you who wake early on a Saturday morning (or are extremely late in after a Friday night) might want to catch Business on BBC Radio Scotland at 6am. I have another excuse for not listening (I’ll be in Boston), but if you miss it the programme is repeated on Sunday at 10am or on the iPlayer.

Why would you want to? Well, you can hear Alistair Darling, Robert Peston, Bill Jamieson and me reminiscing with the BBC’s Douglas Fraser about the banking crisis of five years ago and giving our opinions on whether we have learned the lessons of the crash. I’ll leave the others to give their own views, but my answer is no: despite the torrent of new national and international regulation, there is too much ‘business as usual’ to be certain that the fuel for the next crisis isn’t already being stoked up.


The Bank on The Mound

The Bank has gone but is hubris back?

We have completely ducked the fundamental problem, that our banks are too big and there is too little competition. In the programme you’ll hear Darling say that in 2008 he couldn’t be sure that the rescue plan he and Gordon Brown launched would work. What he was sure about was it was all they could do. The balance sheet of RBS was three times the total of UK GDP, and that didn’t count HBOS and all the tiddlers which went bust, like Bradford & Bingley, Dunfermline Building Society etc.

It was literally a confidence trick – an attempt by the Government to restore confidence in the banking system. Luckily it worked, but there is no more an economy the size of the UK could have done – they were too big for the State to absorb and the consequences would have been horrendous. Five years on RBS and Lloyds (which blindly acquired HBOS without knowing what it was getting) have written off many tens of billions, but they are still too big to save.

They also face too little real competition. Despite the hiving off of TSB, the acquisition 300 branches of RBS by a consortium including the Church of England, and all the publicity given to the so-called challenger banks, the Big Four – RBS, Lloyds, Barclays and HSBC – still have a stranglehold over all UK banking markets.

The Government ought to have enforced the break-up of at least RBS and Lloyds. We haven’t even had an examination by the Competition Commission. The last one, by Don Cruickshank in 1999, was attacked by the banks as “snooping” and ignored by Gordon Brown, the man who set it up.