A big shake-up of UK banks with taxpayer support will be have been unveiled by the time you read this.

An announcements on the future of Lloyds and Royal Bank of Scotland is expected to be made jointly by the banks and the Treasury. Predictions are that Lloyds will want to raise more than £20bn from investors in return for staying out of the state-run insurance scheme to cover toxic loans. Both will also have to set up new banks out of their existing branch networks and sell them within four years.

The creation of the new banks is on the instruction of the European Competition Commissioner, Neelie Kroes, and is supposed to boost competition.

RBS is also expected to confirm that it will participate in the government’s toxic loan scheme, but on different terms. The bank, which is 70% state-owned, would buy an insurance policy from the government to cover future losses from some of its more toxic investments.

The announcements are set to include approval from the European Commission of plans to cut back the size of the banks with disposals of branches and other assets. The Commission had demanded that banks bailed out by taxpayers should be scaled down. The result being that a big asset sale will be announced. RBS has already warned that it may have to sell more of its businesses than originally planned to gain European approval for state support it has received since coming close to collapse last year. While RBS is set to announce the sale of its insurance businesses Direct Line, Churchill and Green Flag as well as more than 300 bank branches, for its part, Lloyds will announce the sale of Cheltenham & Gloucester and Intelligent Finance.

So what is to be made of all this financial mumbo-jumbo? Obviously it can’t be to protect the interests of taxpayers, workers or poor people or else the government and capitalists wouldn’t be doing it. The question is whether it will make the financial system more secure from the kind of banking crisis we’ve witnessed over the last year.

The more economics minded amongst our readership may be better placed to look at the short-term advantages and disadvantages of the latest reshuffling of the transaction elements of capital, but from a more simple but more fundamental point of view the whole motive concept of banking that lays claim to goods and services without producing anything intrinsically useful is bound to the a house built on sand.

The bankers are undoubtedly smart folk or they would not have been able to come up with such an intricate scheme for robbing people, they just need some motivation to work for the common good not against it. An angry organised working class for starters.