It's time to move on for Prudential and the FSA But after three long years of licking wounds, everyone can now move on. And perhaps the PRA, the restyled regulator which comes under the auspices of the Bank of England, will prove a less leaky vessel. Mervyn King makes an unlikely vandal but he is damaging banks As Philip Larkin might have written had he been interested in the macro-prudential regulation of the financial system: "They screw you up, your regulator. They may not mean to, but they do. Sir Mervyn King, the outgoing Governor of the Bank of England, is an unlikely vandal, but in his last few months he has inflicted substantial damage on the banking system. Last month, he called for Royal Bank of Scotland to be broken up, sending its shares lower, and now the Bank's Financial Policy Committee, which he chairs, has identified a £25bn capital shortfall in the country's major lenders. Coming on the back of years of regulatory uncertainty, the impact is to keep the spotlight on lenders that have changed beyond recognition since 2008. The £25bn figure may be perfectly manageable - roughly half of it is already factored into existing capital-raising plans - but the report's importance is less the number itself than what it says about the Bank of England's view of the banks. Attention has understandably focused on the impact the capital raising could have on lending, but this misses the point, given Sir Mervyn's explicit instruction that banks will not be permitted to cut their loans to business to hit the new capital targets. The FPC is recommending that the Prudential Regulation Authority (PRA), which will take over bank regulation from the Financial Services Authority next month, should apply higher capital requirements "where banks are highly leveraged to their trading activities." All told, it suggests a substantial reallocation of capital away from investment banking towards commercial and retail operations. While that might be welcomed in some quarters - investment bankers have, after all, become pantomime villains, blamed for single-handedly precipitating the crisis - it is not entirely fair. As a report published on Wednesday by the Institute of Economic Affairs pointed out: "There was an idea that investment banking, described by the naïve as casino banking, was more risky than normal banking. This was quite the opposite of what had been the case in the UK, where the notable failures were of normal commercial banks [RBS and HBOS] which threatened the stability of their investment banking operations. In fact, increasing the reliance of our largest banks on commercial and retail banking could be making them more, not less, risky. If you remove the drivers for banks to generate profits, then they become more risk-averse and less active generators of economic activity. With the PRA now set to enter negotiations with banks on how much capital they might need to raise, an exercise that could have ended uncertainty will instead generate even more. Revived Jessops will refocus on high street When Jessops collapsed into administration in January, closely followed by HMV and Blockbuster, its demise prompted much agonising over the death of the high street. News of the camera retailer's reopening suggests all is not lost. Indeed, the revival of Jessops is a demonstration of the role the high street can play in an industry whose buzzwords - "multi-channel" and "omni-channel" - simply mean encouraging customers to buy products across a range of formats. John Lewis has rolled out a significant click-and-collect operation that allows customers to collect online orders from stores and Jessops" new owner, Peter Jones, believes the click-and-collect model is its future. His theory is that customers looking to buy a camera want to discuss the technology and products with experts. Clearly, the plan is risky since Jessops has already failed once, but it is logical. If Jessops is going to compete with internet rivals such as Amazon, then it must offer something unique. A high street presence could be the answer.