Over the last two years we have seen the global financial services industry go through an immense period of dramatic lows and lets face it, not to many highs. Our banks in the UK have certainly played their part and, it can be argued, played a huge role in taking the UK into recession. Many banks including RBS and HBOS changed hands from private to public ownership (well as good as) casting doubt on the very market economy principles on which Britain has been run over the last decade and beyond. Our European counterparts have been subjected to similar torment first with ABN, then the Icelandic banks then ING. The story goes on. But what does the future hold for our UK banks that are now in government ownership?

Well, according to the latest reports the government has decided that Lloyds, RBS and Northern Rock are to be broken down and parts of the business to be sold off in order to create three new banks. The process is certainly underway as the European Union has agreed the split of Northern Rock into what will essentially be the good side and the bad. The bad side could remain in government hands, which indicates that the public may still have an ongoing price to pay for the financial mess that was created by the bank. The next task for newly appointed Chief Executive, Robin Budenberg, of the UK Financial Investments is to find a buyer for Northern Rocks assets and billions of pounds worth of shares.

The rationale for this move is to create more competition in the marketplace as ministers have suggested that currently the big four dominate. The move is likely to cause big upheaval of the banking sector in the UK and change its dynamics for good. It is likely that Lloyds will have to be content with a smaller retail presence while new players such as Santander and Virgin Money eagerly wait in the wings to target the right opportunity.

This is just the start of the re-building process in our banking industry and one that will take a number of years before we reach normality once again. For customers the changes may be inconvenient but necessary.