Along-anticipated document landed on George Osborne's desk last week.
It is thought to spell out the process by which the bailed-out banks could be returned to the private sector by handing shares to taxpayers. If the chancellor embraces the plan, he might have a chance of creating a much-needed feelgood factor in the run-up to polling day in May 2015.
The ideas set out by the Policy Exchange thinktank will be published formally on 10 June, just as Osborne awaits delivery of another report, this time one he commissioned, which is rumoured to run to 600 pages.
Drawn up by the parliamentary commission on banking standards, set up in the wake of Barclays' £290m fine for rigging Libor a year ago, the report could have wide-ranging implications for the whole of the banking industry.
The precise timing of the report's publication is not set in stone but the commissioners – including former Chancellor Lord Lawson and Archbishop of Canterbury Justin Welby – will begin a two-day closed-door meeting to try to reach agreement on their recommendations. The commissioners, chaired by MP Andrew Tyrie, are thought to want to make their views known before Osborne's Mansion House speech on 19 June. The date is regarded by bankers as an ideal opportunity for the chancellor to reveal his thinking on the future of Royal Bank of Scotland and Lloyds Banking Group, and to respond to the banking commission, assuming the members have reached consensus on a range of issues by then.
The commission's report is the more influential, and is likely to make uncomfortable reading not only for Barclays but for the many other banks that gave evidence over the past six months. During that time RBS and Swiss bank UBS were also fined for rigging the Libor rate. Even HSBC and Standard Chartered, which had come through the banking crisis relatively unscathed, were fined by US regulators over money laundering and sanction-busting respectively.
Peter Hahn of Cass Business School, who himself gave evidence to the commission, wonders whether such bad behaviour is seen as a "cost of doing business" by the banks. "Everyone at the senior management level would say, of course no," he says.
Hahn points out that the commission helped personalise much of what went wrong in the crisis. Its stinging report into the collapse of HBOS forced former chief executive James Crosby to hand back his knighthood. At one hearing, former Lloyds boss Eric Daniels was lambasted for the sale of payment protection insurance while at another Welby described UBS as a "corrupted organisation". The auditors who signed off banks' accounts, and the experts who set pay and bonuses at the big banks, have also been subjected to grillings.
The financial sector is therefore braced for a wide range of recommendations, such as new criminal offences making it easier to send bankers to jail, a crackdown on City pay, a 10-year deferral period for bonuses, the creation of portable bank accounts to foster competition and – bankers' worst fear – a recommendation for a full-blown competition inquiry.
For a brief period the commission strayed into the question of whether RBS should be broken up, a policy advocated by Lawson, who may try to convince his fellow commissioners to back a recommendation to split RBS into a good and bad bank. Sir Mervyn King, outgoing governor of the Bank of England, backs a similar idea, while Welby has called for RBS to be split into regional banks.
Osborne's views on achieving a sell-off have not been made public but he is not thought to be keen on splitting up RBS. He told the commission nationalising RBS, likely to be necessary if is broken up, could cost the taxpayer up to £10bn.
After the International Monetary Fund urged him last month to set out a view on the banks, he said: "Now is the time for a clear strategy on how to return RBS and Lloyds to the private sector in a way that protects value for the taxpayer."
Legislation may well be needed. Shadow financial spokesman Chris Leslie said: "We will want to question the chancellor's motives on this front. He has already started using the language of 'we'll never get our money back'."
If the chancellor does kickstart a share sale, it could provoke fresh speculation about the management of the two banks. Lloyds chairman Sir Win Bischoff has already said he will stand down, while chief executive António Horta-Osório will earn a bonus if he stays on to oversee a share sale.
At RBS, chairman Sir Philip Hampton has reportedly told the bank's non-executive directors that he has begun a search for successor to Stephen Hester, parachuted in as chief executive during the 2008 bailout. But Hester, who is close to seeing through his five-year turnaround programme, said in May: "If I'm wanted [to lead the privatisation] why wouldn't I want to do that?"
Osborne seems to be preparing to reveal when and how that privatisation might begin.
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