What struck me most forcibly last week was that as someone with net deposits (mortgage excluded) in banks I was lending banks cash when they were refusing to do the same to each other. The paradox of that was really quite striking. Why was I taking the risk on lending to banks when they would not? And why should I take the risk on the toxic loans on their balance sheet when they were not willing to do so?

Of course, I have alternative options available. I could put some money in National Savings, for example, but the reality is that this reduces my options for managing cash.

As a result it occurred to me over the weekend how absurd it is that we do not have a secure savings and deposit bank in this country. If like me you are old enough to remember that the TSB in Lloyds TSB stood for Trustees Savings Bank then you will know that we once had such a system. I think we need it now. I think we are going to need it even more in the future.

My suggestion is simple. We can't go back to the TSB but we can create a New Deal Bank. This would achieve the following:

1) It would be a deposit taking bank;

2) It would offer current accounts and debit cards but would not offer overdraft facilities;

3) There might be a limit on the maximum sum that could be deposited: £100,000 might be appropriate. Since then this bank would enjoy better government protection than any other the degree to which a person might make use of that guarantee must be limited;

4) The price of that guarantee will be slightly lower interest rates;

5) The guarantee will be backed by the investment policy of the bank: it will only put its money in government bonds and new local authority bonds and publicly approved enterprises designed to tackle climate change (which will carry government guarantee).

6) The local authority bonds will be used for designated social purposes: social housing, education, health, flood defence. Anyone will be able to understand the use that is being made of their money.

The arrangement is low cost: the deposit arrangements could be managed on a 'vanilla' basis either by another bank or using the spare branches made excess to requirements by the Lloyds / HBOS merger.

The investment side will be low risk and easy to manage. The margin required to cover costs will, therefore, be small.

I guarantee it would have market.

It will help raise the vital public capital on which it is now very obvious we are going to depend.

I'll add it to my wish list for the Pre-Budget Report.