What Needs to Be Done in the U.S.

Once again the U.S. is late to the game. The UK and EU are taking the lead in addressing some of the root causes of the financial meltdown and we are still playing patty cake. The Dutch led the way, though pushed by the EU, with the break up of ING and now this. It is time for the same thing to begin happening in the U.S. The 'too big to fail' lie has been proven wrong and it is time we got back to a system where competition is a vital part of the everyday financial world.

The European Union will today approve the split of Northern Rock into two sections, a "good", profitable, bank with no bad debt, and a "bad" bank. Ministers will begin exploring sale options at the start of next year when the split happens and a deal could be finalised before the general election. The remaining "bad" bank will remain in state hands for the time being although sales of "tranches" of the more risky mortgages it holds will be explored in the longer term.

The Lloyds and RBS sell-offs will follow over the next three to five years and will be supervised by UK Financial Investments, the government body set up to oversee taxpayers' investment in the banks.

The Government is understood to have made clear that existing larger operators will be banned from participating in the sales.