Simon Johnson considers a superb speech last night by Mervyn King, Governor of the Bank of England, and a New York Times article today on former Federal Reserve chairman Paul Volcker, and tells us, in a post titled The Consensus on Big Banks Begins to Move, that their "words mark the beginning of a new stage of real reform."

By which he means: The chances are growing that governments will accept that "too big to fail" is a bankrupt strategy, and therefore the time to break up the big banks has arrived.

I wish I could be so sanguine. Mervyn King's speech is great (not least because of some apt quotations from Sir Walter Scott, which remind us that nearly 200 years ago, "prosperity" was also threatened by the "over-speculating undertakings" of "capitalists who sought gain not...