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There is an attraction to removing the risky, casino-style roulette wheels of banking from the utility bits on which we all rely. So says Shadow Chancellor George Osborne, pointing out that he's not following , but has been arguing this since last July.

He's right. There is an attraction to that. But it's not clear that a break-up is the solution to the problem of banks that got into trouble over the past three years. Was it because there was too much risk linked into the mainstream retail banking facilities that no government could be allowed to fail?

In the case of the Royal Bank of Scotland, that may well be so. But was size or too much proprietary trading (risking the bank's own assets) when Northern Rock got into trouble? On the contrary, its problem was a lack of savings to fund its risky lending, and its dependence on wholesale borrowing, at a time when it became much more scarce and expensive.

Halifax Bank of Scotland, now part of Lloyds Banking Group, was taking some risks in its trading. But the giant hole left in its accounts resulted primarily from risky mainstream lending to corporate customers and mortgages for home-owners.

Unexpected tax

And Lehman Brothers? It didn't have a significant retail presence, and specialised in investment banking. But when it collapsed, in September 2008, the shockwaves ran and continue to run through every aspect of the financial system.

So the case has yet to be made for creating walls between necessary retail banking and risky investment. There's risk involved in lending to ordinary customers, including those Americans who were encouraged to buy sub-prime properties.

The core of banking is, or should have been, about managing risk, rather than pretending it can be avoided completely.

The implications of the policies favoured by President Obama, Would-Be Chancellor Osborne as well as the Lib Dems' Vince Cable could start by seeing the Royal Bank of Scotland forced to sell either its Citizens' Bank retail operation or its investment business in the US, before it is forced to split in its UK home market. It could also see changes in ownership of the US banks with significant employment presences in Scotland.

RBS already faces a sizeable unexpected tax bill if the president's proposed Bank Responsibility Levy is introduced. That would be spread over ten years to pay back the support given by the US taxpayer.

And that brings us to a crucial difference between the American and the British position. President Obama is taking a populist stick to the banks, to get payback.

Trade-off

But Britain's payback is very different. Taxpayers have collectively sunk more than £60bn into equity stakes in RBS and Lloyds. That isn't to be paid back in taxes. The plan is to get the banks back into a profitable state, so that share prices rise and those stakes can be sold off at a profit.

Those who wish to break up those banks run the considerable risk of reducing their profitability, thus making it more difficult for the taxpayer to turn a profit on the investment.

So, unlike the American position, there's a likely trade-off in Britain between cutting the banks down to size and maximising the public's financial return.