When you're in a hole, the usual advice is to stop digging.

Faced with the implosion of his economic strategy, one might expect George Osborne to avoid anything that might accelerate the pace of UK financial-sector deleveraging. Instead, the chancellor of the exchequer said on Monday that he will plow ahead with bank-overhaul proposals recommended by the Independent Commission on Banking, including forcing banks to segregate, or "ring-fence," retail operations, proposals the Treasury estimates will cost the UK banking sector up to £8bn a year, equivalent to nearly half its likely 2011 pretax profit.