The US is behind the curve on this issue, like most issues related to moving beyond the massive financial collapse. The Dutch were pushed along by the EU the other day with ING and now this. Some still argue the benefits of these beasts but in reality, the mega banks only helped stitch together even larger commissions for the lucky few. They encouraged monster deals that were too often about benefiting the deal makers. Those days appear to be living on borrowed time. The days of less competition in the UK banking sector are also in trouble.
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.
