Stephen Hester, the new chief executive of Royal Bank of Scotland, has done the right thing.
By announcing that the Edinburgh-based bank, which also owns NatWest, will give customers in difficulty a six-month moratorium before beginning repossession proceedings, he is making it harder for the government to claim a victory over the banking sector.
Smart move, given that as of today the taxpayer owns almost 58% of the bank. But it will not make much difference to repossession statistics unless other lenders follow suit.
RBS does not have a long list of customers whose homes are on the brink of being repossessed and Hester would be unlikely to make such a major announcement if felt it would have a serious impact on the bank's battered finances.
The pledge will only make a real difference to troubled customers if other lenders follow suit. The first should be Northern Rock, 100% state owned, and responsible for one-in-10 repossessions.
