Chancellor George Osborne must face up to taxpayer losses in Royal Bank of Scotland and accelerate plans to return the bank to the private sector, Bank of England Governor Sir Mervyn King has said.
The central Bank boss told MPs the Government had failed to take decisive action to overhaul RBS and needed to complete a radical restructure of the bank to create a healthy lender within a year.%VIRTUAL-SkimlinksPromo%
He said RBS was holding the wider economy back, but added it was "not beyond the wit of man" to split RBS into a 'good' and 'bad' bank to ensure the cleaned-up group could support lending and boost economic recovery efforts.
"The lessons of history is that we should face up to it - it's worth less than we thought and we should accept that and get back to finding a way to create a new RBS that could be a major lender to the UK economy," he said.
Sir Mervyn's comments will come as a blow after RBS boss Stephen Hester last week insisted the bank's return to the private sector was on track and could be completed within two years. In a hearing with the Parliamentary Commission on Banking Standards, Sir Mervyn said plans should go further than those being led by Mr Hester to reduce RBS's balance sheet and signalled the Government should take charge to get the bank in a fit state "sooner rather than later".
He said it was "nonsense" that the Government could run the bank at an arm's length, given that it is 81% owned by the state.
"Time has passed and aside from reducing the balance sheet, nothing has been achieved - we haven't managed to get it into the private sector," said Sir Mervyn. "It would be much better to accept that it should have been a temporary period only, and the longer this goes on, the more difficult it becomes."
Sir Mervyn confirmed he had discussed his view on RBS with Mr Osborne, but the Chancellor recently told the commission he believes there are "very considerable obstacles" to splitting RBS in two and backs current plans to instead shrink its balance sheet and focus its activities on the UK.
RBS last week claimed improvements in the core bank would see it return to financial health next year as it reported underlying group operating profits nearly doubling to £3.5 billion in 2012 from £1.8 billion in 2011. But bottom-line figures revealed the fifth year of losses since its £45.5 billion government bailout in 2008, plunging into the red by £5.2 billion in 2012.
Asked about Sir Mervyn's comments on RBS, David Cameron's official spokesman told a Westminster media briefing: "The Prime Minister's and the Government's view is that what we are doing around the implementation of the Vickers proposals around ring-fencing of investment banking and riskier activities - relative to high street activities - is the right thing to be doing."
10 things we hate about our banks
BoE boss in warning over RBS loss
More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.
The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!
(Pictured: Martin Lewis after the PPI payout ruling)
Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.
Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.
While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.
You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.
Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.
A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!
While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.
Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.
If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.
The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.
Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.
In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.
"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."
The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.
When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.
When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.
Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!
The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.
About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.