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Moses had an easier ride after he came down from Mount Sinai, setting aside that awkwardness with the Golden Calf. Unlike Sir John Vickers, who published important proposals for UK banking reform on Monday, the prophet was not opposed by professional lobbyists determined to give the Israelites some wriggle room on the toughest of the Ten Commandments. Nor was he required to phase in prohibitions against covetousness in the light of economic weakness.

Given a leisurely 2019 deadline for the implementation of prudential measures, reformers will have to work hard to prevent Sir John’s sensible central proposal – the ringfencing of UK retail banking – from dying the death of a thousand amendments. The cordon sanitaire, though more flexible than first envisaged, has still triggered objections from banks and business bodies.

But the triggering of unwritten state guarantees for struggling banks during the credit crunch means that there should be no return to risky business as usual. Future bail-outs are less likely under a regime boasting ringfences, stronger capital and a new rescue and resolution regime. Discretionary tinkering with lending – an option floated by Peter Sands, chief executive of Standard Chartered – requires a prescience that the UK financial authorities have historically lacked.

The estimated £7bn ($11bn) yearly cost to banks can be spun as a reduced contingent cost to taxpayers. Similarly, a more robust UK banking system could attract more capital than it repels. Most importantly, it would strengthen the licence to operate that society grants to banks, which the credit crunch has weakened.

The report has some flaws. These will be highlighted by critics with a traditional interest in harvesting returns from volatility. First, ringfencing alone would not have forestalled collapses such as that of Northern Rock. Second, the document promises more than it can deliver by suggesting that a rejig of UK banks will damp broader risks. Third, small business may feel let down that Sir John has dodged an apparent commitment to make Lloyds sell more branches than the 632 specified by the European Union.

But that is by the by. Universal banks will never again prompt the investor idolatry of yore. Regulation appropriate to their quasi-utility status will push rewards for turbulence – and systemic risks – further into the shadow banking sector. For example, big non-financial companies could wind up speculating with retail deposits under the new regime. Whack a rat back down one hole and it always pops up somewhere else.

Bald facts needed

It would be invidious for Lombard, recently described as “folically challenged” on the FT letters page, to invoke the analogy of two bald men fighting over a comb. Yet the spat between Healthcare Locums and US hedge fund Permian is reminiscent of just such a slap-headed stand-off. Aim-traded HCL is running out of cash. Permian, which owns 6.35 per cent of HCL through contracts for difference, wanted the company to broker the sale of debts valued at more than £100m to a US investor willing to give it breathing space.

No would-be rescuer has stepped forward publicly in recent days to give credibility to Permian’s optimistic plan. Sadly, a bombed-out UK people business beset by allegations of accounting irregularities may not be a hugely compelling investment proposition. Peter Sullivan, chairman of HCL, therefore got the go-ahead from shareholders for a highly dilutive £60m share placing on Monday, albeit by the slimmest margin.

Permian’s founder, Cara Goldenberg, has questioned the role played by HCL and its advisers in handling expressions of interest in its own debt. For the sake of transparency, companies should perhaps disclose who has approached them with plans to buy their borrowings. Thanks to Takeover Code changes, they will soon be required to name bidders who want to buy their equity.

M&B low ball

It would be desirable if Joe Lewis, the investor and philanthropist, bought the 77 per cent of lacklustre Brummie pub company Mitchells & Butlers that he does not already own. His influence may be partly to blame for an unhelpfully high level of turnover among senior executives. But it would also be desirable for Mr Lewis’s vehicle Piedmont to offer more money. A 7 per cent jump in the shares on Monday left them a tad higher than the 230p that Piedmont says it may tender in cash and through a partial share alternative. They were 30 per cent higher in May. M&B has a lot of debt and has been trading poorly. But investors should hold out for a better price.

jonathan.guthrie@ft.com

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