David Prosser: Champagne all round as the banks get back to business

Comment

Lloyds' attempt to strike out thousands of legal cases against it is the cherry on the cake in a very happy week for Britain's banks. Wednesday's Supreme Court ruling against the Office of Fair Trading's probe into overdraft charges was as big a surprise to the industry as it was to customers.

Then, less than 24 hours later, came the final report of Sir David Walker, a scion of the City appointed by the Government in the wake of the credit crisis to investigate how our banks are run. Not a single banker offered up a word of complaint, while Lord Myners, the Treasury minister, lamented the "tin ears" of the City.

No wonder. With the exception of a raft of recommendations on pay, all of Sir David's reforms are to be incorporated into what is effectively a voluntary code of good conduct. New rules on the disclosure of bankers' pay will have statutory backing, but they will fall well short of what many had hoped for. Not least, the banks will not have to name their most highly-paid staff.

For an industry which has been terrified of a regulatory backlash since it plunged the country into the worst recession in living memory, this week has seen a gratifying return to business as usual. It's been one cosy establishment deal after another – and the champagne's been flowing.

Still, the hangover may yet arrive, in the form of Michel Barnier, the former French foreign minister, who was appointed yesterday as the European Union's new internal market and financial services commissioner.

Taking on millions of customers and a Government attempt to bring bankers to account was child's play. Britain's banks may find Monsieur Barnier a tougher foe. The French have already seen off frantic Government lobbying to prevent him from getting his hands on City regulation.