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As lead shareholder in two giant high street banks, and outright owner of another two smaller ones, Alistair Darling wants them to face more competition.

It may not help the share prices of Royal Bank of Scotland or Lloyds nor the value of Northern Rock and Bradford and Bingley, and so it may diminish his asset value when it returns to market. But the Chancellor reckons the limited choice currently on offer is not good for the economy or for savers and lenders.

That's why he was in Edinburgh this morning, welcoming the expansion of Tesco Personal Finance (TPF), as it announced the hiring of 800 new staff for a new contact centre in Glasgow, as well as the transfer of 500 who have been employed by the Royal Bank under contract to TPF.

RBS was in a joint venture with the supermarket giant until it sold its share to Tesco last December. The Glasgow staff shifting employer are to move to the newly-finished office. Those familiar with Glasgow will know it as being on the site of the former Scottish Television studios at Cowcaddens and next to the Theatre Royal.

Back to the Chancellor's case: that there's a gap in the market after around 30% of the British banking market suddenly retreated last autumn, mainly because Icelandic, American and Irish banks went home to sort out their profound problems. You can now get some of the best deals from the Bank of China or from Israel. And the Chancellor wants to see more competition.

"In the future, you will see new competition coming into the British market, and that's a good thing. What we want to do is to ensure we do make it easier for new people to come into the banking field," he said. "People need choice, and we've lost a bit of that choice in the last couple of years."

I asked him if this is an admission that the current banks are too dominant and bad for competition.

"Market share and competition is something the government is always going to keep under review," he replied. "It's inevitable at a time like this, when the Icelandic banks were really hit, the Irish retrenched, and a number of other foreign banks are doing less than they were, it means the other half a dozen or so main banks are more dominant than they were in the past.

"That's all the more reason to encourage others to come in. But of course, in relation to competition in banking or any other industry, that's something we will always keep under review."

The Chancellor was also talking excessive banker bonuses, for which he's now planning legislation, but without much detail yet available.

His concern now is that if measures are taken to crack down on excess and over-risky incentives, banks can simply take their business and high-earning traders to tax jurisdictions with less hard-line approaches. That's what they're already threatening.

So having discussed this with the French finance minister on Wednesday, he's taking the issue to the G20 finance ministers meeting at the start of next month. He wants more harmonisation, as yet unspecified, but it seems to stop a long way short of a common tax regime for top earners.

"We need far more openness," he said. "Banks should disclose what their policy is, and disclose how many in each organisation is getting how much. There is the problem when banks say if you do this, all our best traders will go to America or other parts of Europe.

"We need to sort this problem out, because it is a global problem. You can take domestic action, but it needs to be complemented with action in other parts of the world, so you don't get one bank playing one country off against another."

With Tesco Personal Finance having a bumper year of growth, its chief executive Benny Higgins told me he's aiming at organic growth, shunning speculation that Northern Rock and Cheltenham & Gloucester could soon be on the market.

His targets for market share? He has none, he claimed. But he doesn't yet see Tesco Personal Finance matching its parent company's dominance in grocery sales.