Royal Bank of Scotland, brought to its knees by Fred ‘The Shred’ Goodwin, turned in a first-half surplus of £1.1 billion while Lloyds hit almost twice the forecast profit with a surplus of £1.6 billion. HSBC came in with £7 billion – single-handedly reaching what had been forecast for the entire banking sector – while Barclays had to make do with £3.6 billion.

Outrage engulfed the bank bosses over their apparent failure to lend sufficiently to small businesses and already grotesquely large proportions of income are being set aside for bonuses.

So is it still just business as usual? Certainly too little has so far improved. Savings rates are excruciatingly low, the banks are making bigger margins at the expense of their borrowers and they largely continue to treat customers as exploitable fodder.

Despite the apparently healthy profits last week, the banks are not yet out of the woods. They may be strong enough to weather another downturn, but they have loans worth hundreds of billions of pounds that need refinancing and that could prove tricky.

With a few exceptions, building societies, too, are still crying out for capital. Mergers and further cash injections similar to the one at Kent Reliance will be needed before the mutuals are restored to robust health.

But there are some small signs of an improved deal for savers and borrowers and for the overall security of the financial sector. NatWest’s charters for individuals and small businesses may have attracted derision from some rivals and there is a long way to go before the bank can show it is meeting its pledges.

But setting out targets for improvement, suggesting that customers have a right to a certain quality of treatment and a determination not to pressurise account holders to buy unnecessary products is a refreshing start.

Though customer inertia remains a huge factor in allowing banks to get away with appalling levels of service, I would be surprised if the credit crunch has not encouraged more customers to move accounts.

While setting up an account of any sort is about as simple as scaling the Berlin Wall in the Sixties, many have become more adept after realising that nest eggs had to be split to take advantage of the maximum £50,000 protection.

And while Metro Bank has only one branch at present and Virgin Money has none, both these newcomers together with Tesco could set new standards that will force the old names to compete.

Certainly, the Barclays branch on the opposite corner of London’s Holborn to Metro Bank, felt compelled to offer cookies to passers-by who were being lured over the road with lollies and biscuits for pet dogs.

The banks have, of course, started trying to neuter the threat of the commission that will in the coming year look into whether their investment banking arms should be spun off. And they are working themselves into a lather over future windfall taxes by, in the case of Standard

Chartered and Barclays, talking ominously about shifting their bases overseas.

Rather more political than a direct result of the credit crunch, the entire system of City regulation is, of course, in the process of changing to place the Bank of England in pole position with the functions of the recently reinvigorated Financial Services Authority largely parcelled up into subsidiary undertakings.

We have also seen the launch of initiatives to improve the dialogue between shareholders and companies and to try to ensure that audits provide the right quality of information rather than ticking boxes in a management lackey way.

More dramatic change would have come about with a hardheaded survival of the fittest approach that would have seen the closure of all manner of institutions. However, that would have cost tens of thousands of jobs, annihilated the savings of many and destroyed shareholder value on a scale that Fred Goodwin could only dream of.

We have muddled through with most finance houses intact, but we are a long way from being able to look around and applaud.

Regulators and politicians must now determine that the few seeds of improved competition are nurtured so there is a lasting beneficial legacy from the most frightening financial implosion in decades.

Certainly, unless the anaemic summer stock markets fade further this week, the Government’s stakes in these two banks could move back into profit.

But under European Union rules on the provision of State aid, no dividends can be paid for another couple of years so there will be little here to cheer.

And it would be daft of UKFI, the organisation that controls these bank stakes on our behalf, to contemplate starting to sell off the shares until it can be pretty sure of pocketing a juicy profit in return for such massive bailouts.

The results will, though, be about an awful lot more than the headline figures. Both banks, despite their claims to be meeting Government lending targets, remain under intense pressure from small and medium-sized businesses – whose survival and recovery will be crucial if Britain is to avoid a double-dip recession – for their alleged failure to provide finance in a reasonable and an affordable way.

Big business, currently cash rich, can afford to sidestep the banks. Small companies cannot and Vince Cable-style alternatives such as regional stock exchanges will be of no current comfort.

Then, of course, big profits give the banks even more excuse to pay egregious bonuses. Though it is too early in the year even for bankers to be thinking about the extra they are likely to tuck away – even if a large proportion now has to be in shares rather than hard cash – figures from the Financial Services Authority last week made it clear that the banking gravy train is still rolling.

The City watchdog estimated that about 3,000 workers in the capital’s financial services sector earn more than £1million a year. That is an eye-watering one in ten workers in the Square Mile.

More incredibly, that figure comes three years of the worst credit crunch in history. Think what a period of improved profits is likely to do to those numbers, and weep.

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What is the point of bank managers? We’ve got so used to the idea that this is a species driven to the brink of extinction that the question-seems entirely spurious. But occasionally a case arises that illuminates why we do need them.

One such case involves Equiniti, the share registrar that used to be part of Lloyds Bank (and if anyone should know that bank managers are endangered it is Lloyds).

In a case we have been pursuing, Equiniti sent a share certificate to a Financial Mail reader but it failed to arrive. Clearly doing anything sensible like sending share certificates by registered post would eat too deeply into the profits of Equiniti and its client companies.

Equiniti then demanded an indemnity from the investor in case the original share certificate were found and misused. The indemnity had to be signed by the investor’s bank manager or by a senior person at a major insurance company (rather less likely than the queen to have anything to do with members of the public, I should think).

There being no bank manager or insurance executive available, the investor was told that Equiniti could arrange the indemnity – for a fee of £56 plus another £35 for administration – charges that would have wiped out several months worth of profit on the shares in question.

Though Equiniti eventually waived both fees, it seems extraordinary that a share registrar should levy such punitive charges when investors fail to come up with signatures that everyone in the real world knows are almost impossible to get. Even the British Bankers’ Association was nonplussed at the idea that anything still required a bank manager’s signature.

Other registrars levy similar fees. They all claim the indemnity is needed because share certificates are like cash; indeed they can be used as security for a loan.

Yet only in rare cases can investors ask for certificates to be sent by registered post – most companies insist certificates are issued at the shareholders’ own risk. Few small investors are aware of nominee accounts where certificates are held electronically.

Life is tough enough for small shareholders at the best of times. Stacking the decks against them by imposing impossible-to-meet conditions for a replacement share certificate is Alice In Wonderland stuff.

The sooner ‘dematerialised’ ( electronically held) share certificates are introduced, the better.

Last week, when Pensions Minister Steve Webb confirmed that employers running final salary schemes would be allowed to raise payments in line with the Consumer Prices Index rather than the Retail Prices Index, there was a furore.

After all, CPI has been running for some considerable time at a lower rate than RPI.

Pensions experts hit the TV studios to say how dreadful would be the impact on millions of retirement savers. But let’s be more reflective. In 1997, the law was changed to oblige pension funds to increase payments to retirees in line with inflation or five per cent, whichever was the lower. In 2005, that became 2.5 per cent.

For most, if not all, major pension schemes, these regulations were an irrelevance. They had – and still have – a link with RPI written into their scheme trust deeds. For many, this inflation link was a trade-off with trustees for being allowed to take pension contribution ‘holidays’. Remember them?

These schemes, unless they rewrite their rules, will continue to pay retirees on the formula of RPI or 2.5%, whichever is the lower.

Some schemes were rather grudging about providing a pension at all and were dragged to the RPI-linked altar in the first place. They may be large in number, but probably affect fewer people than feared.

Payments by these schemes had no index-linking before 1997, so even here the diminution to CPI or 2.5% will make a much smaller difference than expected. The new measure is unlikely to be applied retrospectively.

Don’t forget, that both measures of inflation have been higher than 2.5%, so CPI versus RPI is a side issue to the rate at which pension pay has increased.

Having antagonised the State sector by capping future payments, this Government is hardly likely to want to alienate millions of private pension savers. So, although fewer employees than it first appeared will be affected, this will do nothing to stem the demise of the final salary pension system. 

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A European directive on bankers’ pay duly emerged last week, containing all the subtlety of a sledgehammer. Sure, we want to see the pay of egregiously rewarded bankers curbed. And certainly, forcing risk-takers to accept a large slice of their remuneration in shares, much deferred for a number of years, is sensible.

But, as ever, Europe has gone so far as to make its proposals silly. It wants its rules applied to all bankers. Just how the part-time cashier in a bank branch will react to having a £500 bonus split between cash and shares, some of which can’t be claimed for three years, is anyone’s guess. It is plain nonsense.

The Financial Services Authority, which introduced similar rules a while back for bankers earning more than £1 million a year or for those in significant positions, will be reviewing its code over the next few weeks.

The British rules apply to about 26 banks, including the UK subsidiaries of overseas finance houses, many renowned for their glittering remuneration packages, such as Goldman Sachs.

There are get-outs that should allow the FSA to argue that it can ‘interpret’ EU rules to suit the British market place. It should not hesitate to take advantage of this before bonus season is turned into a financial miasma for thousands of ordinary bank staff.

But, like squeezing a balloon, attempts to curb top bankers’ bonuses are, I feel, bound to result in greed emerging elsewhere – namely in basic pay. And that is dangerous.

Already Barclays, to name but one, has increased the basic pay of many of its top staff, so they needn’t bother themselves with the new nonsense-that may mean they can’t lay their hands on readies as quickly as they would like.

This, of course, has the impact of increasing the bank’s fixed costs – salaries have to be paid in bad times as well as good while (some) bonuses can, at present, be reduced if the going gets tough.

There is a good chance that this will reduce profits and therefore cut the amount of tax the banks pay – just at a time when they should continue to pay more in reparation for the harm they have dealt the economy. And with lower profits, there will be a temptation to reduce dividends, which means we will all suffer through our pension funds and savings.

The FSA should resist importing the daftest parts of the Brussels proposals. But I hold out little hope that any of it will mean harder times for top bankers.

>> See our newsletter for women leaving prison here.

Prison is an expensive way of making bad people worse. So said former Home Secretary Douglas Hurd in 1991. Just three years later his successor, Michael Howard, had reversed all that and the mantra became ‘Prison Works’. That ideology has pretty much held sway – with the previous Labour government committing to a huge prison building programme – until now.

Under immense pressure to come up with his department’s 25 per cent savings, the new coalition Justice Secretary, Ken Clarke, looks set on a massive rethink.

From the work we at FMWF have done with women’s prisons and charities that work with them, this is not before time. Whatever the headlines say, Clarke is not talking about allowing killers and other serious offenders to roam the streets.

He is simply looking at whether it is worth banging people up for short sentences – six months or so – at an average cost of about £48,000 a year only to have about two thirds of them re-offend within 12 or 18 months of release. Victorian, was Clarke’s verdict on this lack of improvement in those sent away for only a short time.

His words echo those of Sue Saunders, governor of Holloway Prison, when she spoke at a recent FMWF gathering. Six months, she said, was too short a time to be able to help the offender. The prison service can try to help those on longer sentences with education programmes, drug rehabilitation and, if they are lucky, back-to-work schemes towards the end of their terms. But, said Saunders, those who come and go within six months largely leave prison unimproved in any way, slipping easily back into a life of crime.

Giving community service orders instead of six months would have a major impact on the women’s prison population. The vast majority of women prisoners are inside for less than a year.

The cost of this – mainly for rather piffling crimes – does not just amount to the £48,000 average a year it costs to keep a prisoner inside. There are also the enormous financial and longer term emotional costs of taking children into care which is a far more frequent occurrence for women prisoners.

There is a problem, too, that women become rapidly institutionalised in prison. Compared with a lonely, grinding existance back on the outside as a single mum living in poverty, the comradeship and lack of responsibility of being in prison can seem appealing which actually encourages reoffending.

The sense of isolation of released prisoners is made worse by the fact they feel they have little other than their experience inside to talk about. Wendy, the former offender who was my co-guest on Women’s Hour not so long ago, said it was one of the hardest things when trying to rebuild a social life as she felt she lacked any small talk that didn’t keep bringing the conversation back to her time in prison – hardly the type of chit chat that an ex-offender believes is going to endear them to a new group of friends.

There is so much wrong with the way the prison system treats women. But Ken Clarke’s brave initiative in sparking a debate about doing away with shorter sentences is a thoroughly welcome step. It may be driven by the need to find cost cuts but it could end in one of the most radical overhauls of our prison services in modern times.

In the week when new rules emerged to encourage greater involvement by shareholders in the companies they own, you could hardly have asked for better examples of why they need to start throwing their weight around.

With the ink barely dry on the Financial Reporting Council’s Stewardship Code for investors – which could serve as a blueprint for financial centres on the Continent and America – it emerged that the lamentably low-key chairman of BP, Swede Carl-Henric Svanberg, took himself off sailing with his new girlfriend just days after disaster struck his company. 

With thousands of barrels of oil spewing out of BP’s Deepwater Horizon rig and his chief executive Tony Hayward rolling up his sleeves to tackle the disaster, Svanberg apparently thought nothing of disappearing for an exotic Far East holiday-a-deux on a private yacht. 

Svanberg, who is paid £750,000 for his part-time job at BP, was to surface a full two months after the explosion, which has had such a catastrophic impact on this once great British company that it is now touted as takeover fodder for rivals. 

Then on Friday, when Financial Mail tried to speak to Michael Grade about the flotation of online grocery group Ocado, where he is chairman, he told us he was ‘leaving it’ to executives to do the talking. 

As I noted last week, the putative £1bn price put on Ocado is high and the company needs the steadying influence of its chairman to convince City investors to buy the shares in the first place – but more importantly to urge them to stick with the company so there isn’t a collapse in the price shortly after flotation. 

Grade, who had to be rescued by boardroom colleagues at Pinewood Shepperton, where he is also chairman, when a major shareholder last week called for his scalp, sounded positively frightened at the idea of talking to us. 

‘No, no, no. I’m leaving that to Tim [Steiner, his CEO],’ he said. For a man who has a rocky relationship with the City anyway after his lacklustre spell as executive chairman at ITV, this is simply not good enough. 

We have already seen shareholder pressure lift (I hope temporarily) from Prudential chairman Harvey McGrath, while Martin Broughton appears to have escaped investor sanction for leaving his chief executive Willie Walsh at British Airways to handle months of industrial action alone. 

And there hasn’t been the twitch of an eyebrow from shareholders in Lloyds Banking Group at chairman Win Bischoff’s none-too-subtle chats with possible chief executives while Eric Daniels remains at the helm. 

Not every company can be fortunate enough to have a chairman of the stature of Sir John Parker at National Grid and Anglo American, or Sir Nigel Rudd at BAA, or Roger Carr at Centrica. 

But if shareholders fail to take action against the extraordinary shortcomings of chairmen such as Svanberg and Grade, they have only themselves to blame if the value of their investment crumbles further.

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Vincentde Rivaz, boss of French energy giant EDF, greeted the Coalition with enthusiasm, even though it had appointed an Energy Secretary (Chris Huhne) who has been vehemently opposed to building new nuclear power stations. 

This week EDF will say that its plans to build two reactors at Hinkley Point in Somerset will create 5,000 jobs, contributing hundreds of millions of pounds to the local economy. 

Though Gordon Brown’s brother is media attache for EDF and it was the previous government that gave the green light to Hinkley Point, the French group ticks all the right boxes for a Coalition desperate for the private sector to offset the planned 25% cuts in Government spending. 

Such extraordinary cosying up couldn’t have anything to do with the fact that EDF still hopes for fast track planning consents for its nuclear empire from its new political friends, could it? 

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Bullying is never acceptable. That is why the swathe of big companies extending the time they take to pay small suppliers is so unpalatable, not to mention dangerous, as it risks draining the lifeblood of the economy at a delicate time. 

That these companies claim to subscribe to the Government's prompt payment scheme is ridiculous. Yes, we have extended our payment deadline from 30 days to 120 days, they say, but we pay on time at the end of that period. 

This is baloney and utterly against the spirit of the guidelines, which encourage payment within 30 days. 

Companies such as Unilever, Dell and Argos, which pride themselves on being good corporate citizens, should be ashamed of such tactics, shoring up their own cashflow while applying a tourniquet to others. 

We’ve felt the pain, but the real question following the maiden Budget from George Osborne is where will the big economic gain come from?

Even to meet the downwardly revised growth figure of 2.3 per cent next year, business, industry and the City will have to start motoring to pick up the slack – in terms of jobs and tax take – that the scything of the public sector will bring about.

Certainly, I would be surprised not to see some uptick in activity later this year as, even in their shellshocked state, some families bring forward big ticket purchases or work on their houses to get under the wire before VAT rises to 20 per cent.

Osborne gave a neat National Insurance incentive to small firms to encourage them to hire. But while the corporate world can look forward to a gradually reducing tax rate some investment incentives have been curbed which could hit productivity. The finance sector outside the City is still not in hiring mood.

Richard Lambert, head of the Confederation of British Industry, gave a warm welcome to Osborne’s assured first foray at the dispatch box indicating that his members are ready to get on with the job. Tax revenues have been increasing for three months, suggesting that business is not on its knees.

But much of their success will hinge on keeping interest rates and the pound low to give our exporters a fighting chance.

The pound rose strongly against the dollar and the euro last week after Andrew Sentance of the Bank of England’s monetary policy committee argued for increasing the base rate to tackle incipient inflation, likely to worsen with next year’s VAT rise.

However, Bank governor Mervyn King has allowed the two per cent inflation target to be shredded on countless occasions in recent years and has already signalled a willingness to keep rates low if the Government tackled the deficit.

Inflation cannot be allowed to spiral out of control. Imagine the outbreak of unrest among the six million state sector employees now facing a two-year wage freeze, the difficulties for those on a fixed income or the impact of so many index-linked benefits.

But temporary laxity would help deflate our groaning deficit and might give a bit of a feelgood factor to the hard pressed middle earners as their mortgage payments – just like Government debt repayments – appear to be magicked downwards.

>> Click here to read FMWF’s exclusive small businesses’ guide to the Budget written by Financial Mail’s Enterprise guru Helen Loveless.

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You have to go back to the days of dotcom madness to find a substantial company that has come to market while chalking up losses.

Ocado, the posh online grocery delivery business that has ties with Waitrose, is planning to do just that. Last week it said it would raise about £200 million through a stock market listing that is likely to value it at £1 billion.

For a company that has never made money, this is a heady sum. Ocado has about £100 million of debt and turned in an operating loss of £2.7 million in the six months to May. Sales may have been up 29 per cent to £230 million with Ocado laying claim to 14 per cent of the £3 billion online grocery market. But the company has expensive plans for a second warehouse and, so far, its model has not been tested outside densely populated London.

Online grocery shopping is expanding, but the supermarkets will not allow Ocado to take more than its fair share. Even Waitrose, whose pension fund owns 29 per cent of Ocado and which supplies the operation, has chosen to compete head on through Waitrose Direct rather than buying the rest of the firm.

It is likely to take Ocado three years to hit £1 billion of sales. The average profit margin for supermarkets is about six per cent. Ocado might be able to better that to, say, 10 per cent implying a profit of £100 million a few years out. But that makes the putative multiple today look extremely rich.

Shoppers who have spent £300 with Ocado this year and are being offered the chance to buy shares should stick to buying groceries.

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If the loss of BP’s dividend was uncomfortable, there may be worse to come from the banks.

The Bank of England is calling for restraint on bonuses and dividend payouts to help increase their capital so they can lend more.

Salaries and bonuses account for about 26 per cent of revenue – up from 23 per cent between 2005 and 2007.

If it comes to choosing between squeezing their bonuses and squeezing our dividend payments, you don’t need more than one guess which way they will jump.

Billed as the biggest shake-up in City regulation since the previous biggest shake-up when Labour took office in 1997, Chancellor George Osborne last week unveiled his radical plans for the future of financial oversight.

Except that the change is not really so radical. Certainly Mervyn King at the Bank of England has been given undisputed authority, but then the Old Lady of Threadneedle Street was never really that hamstrung that it felt unable to speak out when it saw issues developing.

Indeed, King did warn on the scale of consumer borrowing and the building of the credit bubble. It is to his discredit that, though he threw out several warnings, he did little to drive home their import to his masters in the Treasury.

Now, however, it has been spelt out that anything to do with banks is Mervyn’s responsibility. The part of the Financial Services Authority charged with keeping an eye on goings on within individual banks will move under King’s wing, but will effectively keep doing what it has been doing for the past few years. And FSA boss Hector Sants will remain in charge of that.

The ‘new’ crime unit will simply be an amalgamation of the ‘old’ crimebusters at the FSA and the Serious Fraud Office, while hopes of any real muscle in the planned Consumer Protection Agency will need seeing to be believed, as my colleague Richard Dyson argues on Page 80.

Certainly, clear lines of authority can do no harm in improving our lacklustre standards of financial regulation. But in a speech to the Institute of Securities and Investments Conference last week, Sants spelt out what really needs to happen to drive meaningful improvement in City standards.

Regulators, he argued, must start to ensure that the companies they oversee operate ethically and with integrity.

Rules are still needed, but they are not enough. Many senior executives arrogantly regard rules as applying only to little people, others see them simply as something to be got around. Ticking a few boxes has never and will never act as a deterrent to the most abominable behaviour.

Sants has therefore correctly concluded that much of his job should be to assess and judge the integrity of an organisation, not simply take a chief executive’s word for it when, so clearly, there is a yawning chasm between what the boardroom thinks is going on and what often takes place rather lower down an organisation.

The ethical DNA of an organisation can now be measured. Sants is right to suggest that regulation should start to focus on ensuring the firms it oversees have a culture that means in future they will behave in a way that society deems acceptable.

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So much for John Fingleton’s promise of a tough new approach from the Office of Fair Trading.

The embattled investment banking community must have breathed a collective sigh of relief when the watchdog said recently it would confine its investigation of the industry to the fees charged for corporate share issues.

Certainly, this is a bugbear for companies raising money by selling shares in rights issues. Fees usually amount to about four per cent of the value of the issue, even though the investment banks routinely persuade their clients to offer new equity at a deep discount, thereby reducing the chances of them being left with any on their books. They also lay off much of their exposure to subunderwriters.

Not so long ago the charge would have been half that.

The Institutional Shareholders Committee is already looking into this issue and it would be surprising if the OFT does not eventually recommend some change. But this is a timid scratch at the surface when a forensic probe of competition within the entire investment banking sector is well overdue.

And this is not the only area where the chief executive of the OFT has fallen short. Having concluded that usurious doorstep lenders need none of his attention, Fingleton now – as we report on Page 72 – looks ready to duck wide-ranging reform of the insolvency profession, even though there appear to be costly conflicts of interest.

The level of fees charged by the Big Four accountancy groups that dominate the £1 billion-a-year market will escape censure as will the time insolvencies can take. Most ridiculous of all there will be no challenge to the practice that when an insolvency practitioner is called in to advise a lender and recommends insolvency, it is then appointed to handle that work.

Fingleton needs to sharpen up if he wants to live up to his own rather extravagant billing.

Svanberg has been nowhere to be seen since April 20 when the company’s Deepwater Horizon oil rig exploded, even though his chief executive Tony Hayward has become the most vilified man in the US and his company has seen an astonishing £50 billion wiped off its stock market value.

This may pass for chairmanship in the quiet backwater of Sweden where Svanberg was chief executive of mobile phones group Ericsson. But it is little short of delinquent for a man paid £750,000 a year to come in for couple of days a week to hang out his chief executive to dry. Even by recent standards of chairmen who have abandoned their chief executives, Svanberg is in a class of his own.

Yes, Willie Walsh has largely been left to cope alone with striking cabin crew at British Airways while his chairman Mart in Broughton is preoccupied with his new footballing duties at the helm of Liverpool FC.

And Tidjane Thiam fronted Prudential’s disastrous assault on the Asian arm of insurer AIG in the spotlight for some time before chairman Harvey McGrath emerged to stand by his side.

Then there was the broadside by former Morrisons chairman Sir Ken Morrison against departing chief executive Marc Bolland, whom he dismissed at the recent annual meeting as ‘patently not a retailer’ who would not be missed.

EasyJet founder Sir Stelios Haji-Ioannou completely overstepped the mark by likening the airline’s outgoing chief executive to a ‘Sir Fred Goodwin of the aviation industry’. These acts of treachery against chief executives look tame, however, against the way Svanberg has stood silently by as, for all the wrong reasons, Hayward overtook Britney Spears in the mostsearched league table on Google.

Certainly Hayward must carry his share of the blame, both for the Deepwater Horizon disaster itself, and for the gaffes he has made.

His failure to tackle the cost-cutting of the Lord Browne days, which left BP too reliant on thirdparty contractors and lacking the skills to deal with emergencies, counts heavily against him.

More damningly, he appears not to have dealt with BP’s tarnished safety record, which had already caused the company problems in the US.

But Hayward did, at least, take the flak. And the magnitude of the backlash has been extraordinary, even by the standards of the oil industry, where the fallout from accidents is monumental.

Even for the smoothest operator in the world  -  and Hayward can hardly claim to be that  -  the pressure would have been too much for one man.

The chairman and his highly paid public relations advisers should long ago have seized this one by the horns. Early intervention by Svanberg could have headed off some of the bashing the company’s stock market value has taken.

For goodness sake, the company  -  until recently Britain’s biggest  -  is being talked of as a potential bankrupt, a takeover target for the Chinese, or a candidate for Chapter 11 administration.

BP has already poured £375,000 of hard-pressed shareholders’ money into Svanberg’s pockets. It should dump him before throwing more good money after bad and allow a decent chairman time to get his feet under the desk before seeking a replacement for Hayward.

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Much of what is promised by the RBS/NatWest Customer Charter launched this weekend is not new.

There is a lot that most people should already expect from their bank. And there are some commitments that will benefit only parts of the bank’s customer base.

That said, the bank’s determination to go back to basics and offer customers a service they can trust is to be applauded.

Queuing for five minutes is still a long way from the rapid till times offered by the likes of Tesco, but it is a start. More opening on Saturday, early mornings and evenings is also welcome.

But the major hope is that bank staff will stop seeing customers as fodder to sell any old product to and will, instead, offer only what a customer actually wants or needs.

Crucially, the bank’s performance against its 14-point charter will be audited by Deloitte. Financial Mail will also be watching closely as, I am sure, will you, our readers. I will be delighted to hear your views on the bank’s progress.

Read more: http://www.dailymail.co.uk/money/article-1286071/BP-chairman-appears-stage-last.html#ixzz0qp7fmgdO

Now, though, in the wreckage of the banking industry there are the first stirrings of that old-fashioned notion of serving customers rather than fleecing them.

Lloyds Banking Group is, I understand, working on plans that will actually reward loyal customers rather than saving all the goodies to attract new clients.

Clearly, in its enlarged state after the takeover of HBOS, Lloyds – with more than a quarter of the banking market – is not about to seek new customers aggressively. With hefty Government support still in place, rivals and probably Brussels would cry foul. 

Instead, the bank under still-ambitious chief executive Eric Daniels – who, incidentally, I would be surprised to see voluntarily relinquish his position much before 2013 – has apparently decided that nurturing existing customers and offering them incentives to take out additional products is the way to go.

Acquiring customers is expensive and checking out a new applicant’s credit rating also costs money. Selling a new product to the better end of the existing customer base cuts out these costs. The bank appears ready to split these savings with customers through, say, lower interest charges on credit cards or a more lenient approach if a mortgage payment is missed.

LLOYDS’ customer information systems are well ahead of those of its rivals and the hope is that call centre folk will in future be able to look at customers and make more sensitive decisions rather as old-fashioned bank managers used to do.

This all turns upside down what we expect from banks, though smaller lenders such as Coventry Building Society have long tried to reward loyal members.

Cynics might argue that with 22million current account holders Lloyds can hardly get much bigger, so it must flog more to existing customers if it is to increase revenues. And as the biggest name on the High Street, its customers are targets to be picked off by rivals. But a much longer game is in play here. The takeover of HBOS has made the once-vulnerable bank almost immune to takeover threat. That position of domestic power will be cemented if customers can be locked in.

Lloyds can then get on with what it has wanted to do for some time –make its own mega-takeover deal abroad, to add international might to its already fearsome domestic power.

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Phew. What a lucky escape for Prudential’s top duo, chief executive Tidjane Thiam and chairman Harvey McGrath.

Had tomorrow’s annual meeting been scheduled for a few months hence, when new proposals for annual elections of directors come into force, both could have faced a massive revolt by investors that could have cost them their jobs.

As it is, they will meet shareholders who are hostile, but lacking the firepower to do anything about it.

Arguably, the potential ousting of the two top directors at a major company is reason enough for many to hide behind the ‘comply or explain’ provisions of the City’s governance codes and keep annual elections on the back burner.

This should not happen. If shareholders collectively hit the nuclear button and expel the leading lights of their company, that is their choice.

But a rebellion of such force should be foreseeable and there would be time to line up makeshift replacements.

However, votes against an incumbent management are rare and disparate ownership – British shareholders own probably less than 30 per cent of the market –makes concerted action difficult.

It is more likely there would be a substantial minority vote against the re-election of a director. That would send a warning to the board that could then set about an orderly succession.

For executives such as Thiam and McGrath, a big vote in favour would remove the cloud hanging over their futures.

The risk is that companies would suffer rebellion fatigue – as has happened with the ‘advisory’ votes on remuneration policy where votes of ten per cent against were once regarded as a humiliation, but are now seen as pretty standard.

Clearly, there are risks associated with annual elections of directors, but they are far outweighed by better accountability to shareholders.

He will be acutely aware of the message the markets have been sending to governments throughout Europe – you can run but you can’t hide.Last week, the eurozone finally pushed through a bailout package for Greece’s failing economy, but with Portugal, Spain and Italy waiting in the wings, Continental share prices and the value of the euro collapsed.

Angela Merkel then attempted to pin the blame on market speculators with her ban on naked shorting last week, but that did little more than raise suspicions that those betting against the euro and some of Germany’s banks may have got their sums right.

Sadly, as we saw during the bank meltdown, speculators are often correct.

Certainly it was uncomfortable when short selling undermined a rescue rights issue at HBOS.

The City banned it for a while, but a near insolvent HBOS still collapsed into the arms of Lloyds.

As the unpalatable series of emails released in the recent Goldman Sachs ‘Fabulous Fab’ action revealed, short sellers merely put together public information to arrive at their unhappy conclusion.

In that case they were betting that the sub-prime property bubble would burst.

And they were spot on. To meet the terms of the underwriting provided by its euro brethren, Greece will have to downsize its economy to such an extent that it will simply not have sufficient revenues to be able to repay debt. The bailout may have paid the piper – but only until tomorrow.

It is this fear of economic shrinkage as governments impose cuts to reduce national deficits that has prompted the market rout in anticipation of a double-dip recession. 

Though recent economic indicators in Britain have been relatively encouraging, there is frequently an uptick before things get worse.Devaluation within the eurozone is not an option. Devaluation of the common currency would be so politically unpalatable to its largest member, Germany, that this economic behemoth is more likely to consider reviving the mighty Deutschmark.

The pound has already devalued for practical purposes and our exporters have been making gains.

But if the Continent – accounting for 40% of our exports – judders to a halt as it struggles to tame debt, that market will contract and the beacon of industrial recovery for Britain will for a time be extinguished, making our new Government’s deficit reduction task much harder.

It is a glum outlook. But it is not the fault of the markets for calling it as it is. They are the messengers.  

We are the ones who gorged on cheap debt for so many years and now face years of payback.  

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With Lord Myners’ seat at the Treasury still warm, could the new era of shareholder responsibility he fought so hard to encourage before his Labour Party bosses lost office be about to dawn?  

Stephen Haddrill, new chief executive at the Financial Reporting Council, has unveiled plans for a stakeholder group where he hopes to co-ordinate the views of major investors on a range of issues. 

Controversial plans to introduce annual votes for directors should add weight to the relationship between investors and their companies.

Last week, big shareholders threatened to go head to head with the overpaid intermediaries at investment banks who pocket a fortune for underwriting share issues but, increasingly, demand that shares are offered at deep discounts, thereby reducing their risk.  

This initiative, which I have said before is long overdue, comes from the somewhat unremarkable Institutional Shareholders Committee, which should be an uber-powerful organisation, but has actually never done anything of importance.

The new council on share issues – headed by two leading lights of the highly regarded Insight Investments, Dougie Ferrans and William Claxton Smith – marks a determination to enlist the investment companies themselves rather than their trade bodies.

We have had false dawns of shareholder engagement before. After the cataclysmic failure of governance at the banks, in which they were squarely implicated, a new age of responsibility by our biggest shareholders is well overdue.

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