IPPR trustees David Claydon and Clive Hollick argue that the big banks really are in much better shape now, and that it is inconsistent and unpredictable regulation that is inhibiting their ability to support economic growth.

Claydon and Hollick challenge the 'rhetoric of risk', which demands that the banking sector pursues ever-more conservative trading conditions and results in counterproductive moves by the Bank of England's Financial Policy Committee. In the authors' words, banks are like patients who have been rehabilitated but are still required to behave like they're ill. The outcome is that they are unable to play a full role in lending to support economic growth, punishing the valuable SMEs sector and creating social problems around housing and personal finance.