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Was the Financial Services Authority too short-sighted to look beyond the M25?

It's been blamed for lots of other things, but now metropolitan myopia has been added to the charge sheet.

The idea is that the institutions that failed, or would have failed were either in Scotland - Royal Bank of Scotland, Halifax Bank of Scotland and Dunfermline Building Society - or the north of England - Northern Rock in Newcastle and Yorkshire's Bradford and Bingley.

This notion comes from the Scottish Parliament's economy committee. And as in the style of much of its on the future of the Scottish financial sector, it's not really a clear conclusion: more of a sort of vague question.

The report came on the same day that confirmed 350 jobs are to go in Glasgow. From what I hear, it has more to do with the need to fill space in a Cardiff office on long-term lease than a reflection on the workforce at Barclays Partner Finance - a specialist for point-of-sale retail loans.

Failed catastrophically

The economy committee at Holyrood had an impressive cast of witnesses, in a bid to look ahead rather than reflect on what went wrong. Westminster has already done quite a bit of the latter.

But the MSPs didn't miss the opportunity to take a hefty kick at those who "failed catastrophically" in the role, as set out by Adam Smith, for banks to facilitate the general good of the wider economy. It was down, they concluded, to greed.

"Never again can banks and the financial sector be able to hold a gun to the collective heads of the taxpayer where the consequences of their failure are too terrible to imagine," they concluded.

And there's concern the greed goes on, at least according to the trade union evidence, which is quoted suggesting that heavy loan selling pressure is still being applied by managers on their frontline staff.

Looking ahead, the report has some tensions in what it's trying to say. How do you get more competition in Scottish banking without harming the existing Scottish banks and their employment levels, and what would that mean for the RBS's headquarters functions they want to preserve?

It's not spelled out that the banks should be broken up, separating the risky bits from the essential stuff, but that's heavily hinted at, adding some weight to the Barack Obama/Mervyn King momentum towards that.

Capital core

And with Lloyds TSB Scotland now on the market, how do you get commitment to Scotland from its new owners, but duck the question of whether it could or should be headquartered in Scotland?

There was some talk of a Scottish buy-out of the branch network and its financial wiring when the European Commission forced that on Lloyds Banking Group. But it's gone quiet. It's looking less of a viable option when you consider the scale of capital core that would be required.

Then there's the question of what happens to RBS once - if - its share price gets high enough for the Government to sell its enormous stake. Is there any way of stopping it being taken over by another bank, losing its headquarters operation in Scotland? This report doesn't say.

And on that theme of building the public's shareholding value, note what Lloyds Banking Group has : that it is considerably more upbeat about its prospects of getting back into profit this year.

So, having set out with its inquiry to find a vision, the Holyrood conclusion seems to be: have another inquiry. This one should be by the Office of Fair Trading, saying it has failed to keep a watch over the dominance of Scotland's two big lenders (it raised its clear concerns before, and was ignored).

Meanwhile, the Vision Thing is being left to ministers, who have barely altered the financial services strategy in five years.

Since then, there's been quite a bit of change.