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Before answering this, let's shove to one side what you might call the RBS and Lloyds paradoxes - which is that, as semi-nationalised banks, the Treasury could simply instruct RBS and Lloyds to increase their appetite for risk, irrespective of the red ink that might flow.
BBC: Can banks be forced to lend more?
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And if George Osborne agrees with Sir Mervyn that RBS and Lloyds aren't lending enough, then the remedy remains the one it has always been and the one he loathes: he could exercise his rights as their biggest shareholder and order them to increase their appetite for risk.
BBC: Who can boss the banks?
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However, with global economic environment improving in 2009, these firms have again managed to increase their assets largely due to an increase in risk appetite and investment activity by clients, a consequence of returns across most major asset classes improving.
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