Reams of paper have been used to design a safety mechanism for the UK banking sector.

Given that the near collapse of the UK banking system took place in 2008, there is a strong feeling that the Independent Commission on Banking’s (ICB) 363-page Final Report deals with yesterday’s problems.

Two further general observations are warranted about the Report.

First, as Eamonn and other ASI bloggers have noted, it accorded disappointingly little priority to promoting competition. Regrettably but perhaps understandably, given the size of the existing banks with which any newcomer would be competing.

Secondly, many would argue that the central problem is not the banks themselves but some of those running those banks that needed massive subsidies simply to survive.

After all, HSBC is still powering ahead. Admittedly, its enviable status is mainly due to heavy Asian exposure. And, if memory serves, Lloyds did pretty well under the prudent management of the late Sir Brian Pitman.

Not surprisingly, the Government reacted to the ICB’s Final Report by aiming for the long grass. Conveniently, it homed in on 2019, the year when Basle III – with its much higher capital requirements - kicks in.

In the intervening eight years, the Treasury will focus on Royal Bank of Scotland (RBS), the owner of the NatWest and of up-market Coutts. Its unprecedented collapse featured prominently in Alistair Darling’s fascinating memoirs.

RBS received an astonishing £45.5 billion investment from the Government.

Its shares now trade at just above 20p, compared with the Government’s average c50p entry price – the taxpayers’ paper loss is now approaching £30 billion. Selling down this 83% stake now seems years away.

The 41% publicly-owned Lloyds did derive some benefit: the ICB reined back on its interim proposals for further divestments beyond the 632 branches earmarked for disposal under Project Verde.

More worryingly, given the impending Eurozone crisis, further taxpayer support for the banking sector cannot be ruled out.