The U.K. Chancellor is expected to unveil plans today to support proposals to ensure banks are set up so that their High Street branches and savings and loans are not damaged if their investment banking divisions run into trouble.
Former Conservative Party Chancellor Nigel Lawson said on BBC Radio earlier today that he believed two totally different cultures would arise: "prudence and caution" in retail banking, and a "go-go" culture in investment banking.
Harder separation, especially of cultures, is going to put brands like RBS and Barclays under intense pressure.
Will these cultural divisions result in schism, and require two brands, rather than one? Will we see the creation of a new, rebranded division of RBS? And which part becomes “new”? Are these brands more valuable in retail or investment banking? Will the relatively high cost of rebranding a national retail division sound the death knell of valuable, international investment bank brands? Or will this represent an opportunity to turn adversity around and launch a revolutionary new retail brand – one completely redesigned around the customer, doing what newcomers like Metrobank have initiated already, only at scale?
These are high stakes times for U.K. banks. Whatever they decide, the impact should be significant.