Vince Cable: Banks still need 'fundamental surgery'

Business secretary Vince Cable has said the government's reform of the banks is not over as fundamental changes are still required.

Speaking a few days after the Project Merlin deal with the UK's biggest banks was announced, Cable said the agreement had been "helpful" but was "by no means a finished article".

"There needs to be fundamental reform," he told BBC1's The Andrew Marr Show. "There will have to be change and it will have to be radical.

"What we should notice at the end of it is the banks are more competitive and that they are safer and that they are not making large excess profits which then fuel the bonus culture. Those are the big changes that have got to happen."

As well as pledging to lend £190bn to businesses in 2011 including £76bn to small firms, RBS, HSBC, Lloyds and Barclays also agreed to publish the pay of their five highest paid executives below board level.

But Cable said the action taken by the banks on renumeration was disappointing with the "enormous" bonuses expected to be announced by banks during the next few weeks considered "excessive" by the public.