As we enter a more sober era of retail banking - ‘puritan’ banking as some commentators have dubbed it - the savings and borrowing environment is set to change dramatically for the foreseeable future.
Gone will be the 100+ per cent mortgages, self certification, and much of the buy-to-let market. Instead of being offered six times your salary, you may be lucky to get three times your income. You may even be expected to have saved with the institution before even being considered for a home loan.

On the deposit front, we now have an implicit government guarantee that all retail deposits will be 100 per cent protected in the event of a bank failing, (although the government won’t admit to it for fear of encouraging moral hazard).

Shareholders in bank shares, however, may suffer as  banks participating in the bail-out have agreed to scrap their dividends for several years.

Passing the dividend will make it more difficult for these banks to raise new capital so the government’s stake in these banks may increase.

Skipping dividends will also  make bank shares less attractive as the dividends of Lloyds TSB, HBOS, RBS and Barclays were expected to pay out 11 per cent of all the income coming from companies  in the FTSE100 index this year.

For this reason, fund managers running income funds may dump bank shares, putting further downward pressure on the sector.

Bondholders may fare better as the value of bonds should rise as the threat of default eases and the risk involved in holding bank bonds reduces significantly.

For small businesses, there is a glimmer of hope that they may get better treatment - at least if they bank with HBOS/Lloyds TSB and RBS - which have been required to give small businesses and retail customers a fairer deal.

For taxpayers, the long term implications of the bail-out remain unknown, but at least rewards for failure and outsize bonus payments should become a thing of the past.

For more on sharedealing, visit:

http://www.defaqto.com/consumer/investments/share-dealing.aspx 

Check out the top performing unit trusts:http://www.defaqto.com/consumer/investments/unit-trust-sectors.aspx