Does Britain need the 'grumpy old men' bank?

City grandee Sir David Walker (main picture) and former Labour MP John McFall made their names bringing banks to account. But do we need them to launch a company buying up banks in Britain?

News that plans are afoot for a new UK retail banking group is good news but there are already worries the plans being drawn up by Lloyds of London chairman Lord Levene (below) may struggle to live up to expectations. 

According to reports about a dozen institutional investors, including Aviva, F&C Asset Management and Invesco, have been approached by Lord Levene to back an initial fundraising of £50 million. That money would be used to buy up smaller banks to start off with but the new group is also eyeing Northern Rock and Lloyds branches.

Venerable names add credibility

The initial reports are sketchy but the fact that people like Lord John McFall, Sir David Walker and Charlie McCreevy are reported to be on board has given the venture credibility. As David Buick at BGC Partners says, when august and venerable business men such as these 'express their interest and resolution to form a new retail bank, perhaps out of frustration, one must sit up and take more than passing notice.'

Robert Peston, business editor at the BBC, has taken a cheekier stance in his blog, dubbing the new company the 'Grumpy Old Men Bank' or, alternatively, the 'OMIAH Bank (for Old Men in a Hurry)'.

Walker once chaired Morgan Stanley International and headed up the government probe into banker pay.

McFall (above) was dogged in his determination to hold banks and regulators to account as chair of the Treasury Select Committee in the House of Commons. He has accused the existing banks of 'behaving like effective monopolies to the detriment of consumers' and has called for more competition.

McCreevy (above) is remembered in Ireland for his stint as Finance Minister in which he cut taxes and spending, most notably in the 1999 Budget. Between 2004 and until February this year he became more widely known as the European Union's internal markets commissioner.   

Does Britain really need a new bank?

With Spain's Santander on track to secure 10% of the market via its Abbey, Alliance & Leicester and Bradford & Bingley purchases, there is a new name on the block but not really any more choice for consumers.