Spanish bank Santander had its UK business downgraded by one notch, to A1 from Aa3, while Nationwide Building Society suffered a two-notch cut, to A2 from Aa3.

BBC: UK financial firms downgraded by Moody's rating agency

Other candidates for the post included Bank deputy governor Paul Tucker, FSA chairman Lord Turner, Sir John Vickers, who led the government's recent review into breaking up the banks, and Santander bank's UK chairman Lord Burns.

BBC: Mark Carney named new Bank of England governor

What has been brought to my attention is an interesting new way to hive off the 315 RBS branches, which the bank was on course to sell to Santander, before the UK arm of that Spanish giant dropped the deal.

BBC: Investors want to buy RBS's Williams & Glyn's

The deal leaves Santander as the only major UK bank not to offer such access.

BBC: HSBC to allow Post Office access for customers

The reason is that George Osborne is minded to accept the recommendation of the Independent Commission on Banking for a "substantially enhanced divestiture" by Lloyds - which the commission believes is essential in order to create an effective new competitor to the big five UK banks, Lloyds, Royal Bank of Scotland, Barclays, HSBC and Santander.

BBC: Osborne and Lloyds at odds over break-up