I think splitting up the high street banks into low-risk "people's banks" and high-risk, caviar-gargling, casino operators is a smashing suggestion. The more liberal newspapers are making the high street banks of the future sound like an idyllic wonderland where you'll be able to pop in on your way home from the factory, deposit the tax credits you'll get for simply being alive and toddle off home. In the background, friendly bankers in polyester suits with NVQs in "Money" will give out generous loans to locals or green businesses and post large cheques to microfinance projects in Africa.
But where will this money come from in these Garden of Eden high street banks? If all the investments have to be low-risk, I guess the bankers will just bet on sure-fire wins like the chance of someone dying somewhere in the world today or the Grand National being won by a horse with a small man on it. That'll rake in the cash.
But won't these new ultra-safe banks just be building societies (that is, old people's homes where the old people have to leave at the end of the day)? A safe place to be, where the only risk is being hit by a bus on the way home. A slight improvement financially on keeping the money under your mattress, and far less comfortable. Are they designed to actually be profitable, or just somewhere to stash your cash? If it's the latter, I had this amazing moneybox as a child - I don't know where it is now, but it'd be pretty cheap to knock out a load of them.
So long as you don't mind ignoring the poor and uninformed, I think the risk-free banks are a wonderful idea! Everyone knows that the hard-up, frugal and risk-averse all shop online or a country-sized, out-of-town Tesco. That's where the new Banks Lite will be so that they don't trouble the risk-takers visiting the tailor and lunching in fine eateries. We could even make one massive out-of-town branch. Or just choose a town to convert into one that's out-of-town for nearly everyone, like Southampton. Stick the only branch of the new People's Bank there and we're laughing.
The idea might face some resistance, so why not make it more enticing? To follow Ireland's lead, the ultra-safe banks will guarantee 100 per cent of everyone's savings. I love this idea. I can picture the posters now: "The UK's gleaming new bank for everyone! The "Unsinkable Bank"! First branch sails from Southampton. Don't worry about that iceberg!"