Happy Christmas Mr Banker!

George Osborne has signalled the UK's desire to move further and faster on banking reform than any other major international competitor.

George Osborne has signalled the UK's desire to move further and faster on banking reform than any other major international competitor.

In the continued post EU veto atmosphere, here was another move carefully designed to show clear blue water between the UK and the Brussels machine.

The Chancellor's response to the Vickers Report rejected the EU Commission proposals for 'maximum capital' indicating this would water down the Basel III plans to introduce global banking capital safeguards.

So Britain will go it alone.

A ringfence will be created between retail and investment banking. It seems SME lending will be inside the safeguarded highly capitalised ringfence but there is to be consultation on just where lending to big business will sit.

There will therefore be some big questions for the Chancellor to answer now from Britain's big international FTSE 100 companies. Will they face now face higher cost of debt and future capital?

The UK plans will require higher capital in the UK for UK banking operations - but the Chancellor does seem to have recognised the global nature of UK financial sector - and provides some wiggle room for the banking players who have a large proportion of their activities outside Britain.

Finally the Chancellor has pushed popular plans to promote bank account switching - customer will be able to so this in just a week. This should prove a highly popular move with the personal finance press and is due to come in by September 2013.

So if the coalition does not break up on the rock of EU relations, we can expect to see these proposals passed before May 2015 by Parliament - although the Lib Dems will want to see Parliamentary time created to do this faster. The banks have until 2019 to implement the capital package in full.

Speaking in the Commons following the Chancellor's statement former Cabinet minister Peter Lilley - who published his report on the Draft Financial Services Bill earlier in the day - called for the measures to receive pre legislative scrutiny.

That must be the right approach. But a balance needs to be struck between ending the uncertainty for banks and their customers, injecting more competition into the sector and getting the solutions right.

We now have the starting point.

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