A year ago this month, Sir John Vickers, chairman of the Independent Commission on Banking, proposed sweeping changes to the UK banking system. It was a development designed to safeguard consumer banking from riskier wholesale activities and address the notion of moral hazard for risk-taking units. Just 12 months on, and a raft of banking scandals is expected to have an impact on the final proposals in a way that was never envisaged in Vickers’ original report.

The banks looked as though they were on course to win concessions. Industry sources believed that they had already gained significant advantage over the timing of the new reforms and had argued that the separation of retail and wholesale units was overcautious. Then came JP Morgan's multi-billion-dollar derivative losses known as Whalegate, and the Liborgate scandal surrounding the fixing of the London interbank offered rate which cost Barclays a record £290m in fines. In July, there followed a money laundering scandal at HSBC, followed by Standard Chartered's settlement last month over allegations that it had broken embargoes with Iran. These all make the banks' case much harder to argue in the face of public and political outcry.