IF Gordon Brown gets his way, banks will soon be placed in a separate legal category from all other UK businesses. That is the main message of the Treasury’s new paper on financial capability and depositor protection, and it has serious implications for bank investors and customers.

The Treasury stresses that it does not intend to stop banks failing, but proposes so many safety nets that only a very serious and sudden collapse could puncture them all.

So, although it is possible to envisage destruction in value on the scale of Northern Rock’s shares – from a peak of more than £12 to today’s £1 or so – it is far less likely under the new regime.

A rerun of the Rock fiasco with the new fire engines in place would have had the Financial Services Authority hauling in that bank’s (now former) chief executive, Adam Applegarth, to explain why he was relying so heavily and riskily on money markets rather than depositors for mortgage finance. And Applegarth would have known that the FSA had in its back pocket the power to institute a “special resolution regime” which would in effect take control of Northern Rock.

I predict that regime will never be used: its mere existence will keep banks in line. But they will be run more conservatively.

In the old days, the governor of the Bank of England had only to raise his eyebrows to deter a bank from some daft scheme. Hector Sants, the FSA’s chief executive, has inherited the governor’s eyebrows.

All this will make UK bank shares safer and more boring investments, turning them into the cornerstone of any portfolio looking for solid dividend income rather than racy share-price growth.

However, the Treasury also envisages restoring some of their former veils. Banks will not have to reveal if they pledge their assets to secure a loan, and the Bank of England is to be relieved of the 164-year-old obligation to publish weekly operations – the one that made it disclose it had lent Northern Rock £30 billion.

This secrecy is designed to maintain confidence in the financial system, but it may also lure unwitting investors into buying shares in a bank that is shakier than it seems.

Customers’ rights are generally being beefed up, in return for which banks will hit newcomers with a flood of paper explaining every minute detail of the FSA compensation system.

We shall have to see how the various banks interpret this new box-ticking climate. I hope it will not inhibit them from the sort of imaginative initiative Barclays announced last week, the Emerging Markets Optimiser. This will invest in Barclays’ emerging-markets index fund, giving full benefit of any growth but also guaranteeing the original investment. A new twist is that it will invest less when volatility is high, as now, and more when volatility is low.

On the whole, though, I am not sure that banks have entirely entered into the spirit of the FSA message about treating customers fairly, judging by their arguments in the case brought against them by the Office of Fair Trading.

The good news is that customers are fighting for their rights. Clive Briault, FSA retail markets chief, reports that complaints about poor service have increased significantly in the past year, warning that a financial firm’s reputation can now be swiftly damaged as more people are deciding for themselves whether they have been treated fairly.

An excellent new consumer weapon is the FSA’s revamped website, moneymadeclear.fsa.gov.uk .

It’s bright, lively, easy to use and a must for the 82% of us who – according to a Global Review survey – go online to research money decisions. The FSA comparison tables could start to give the commercial versions a run for their money.

Nevertheless, the cause of strict neutrality throws up anomalies. Guess who comes top in the table of instant-access savings accounts? That’s right, Northern Rock.

Money for nothing

BRIAULT also fired a shot across the bows of financial advisers, who are in the front line of educating the public and ensuring they buy the right products.

He said: “We want advisers to act solely in the best interests of their clients, not on behalf of providers who are paying them commission. And we want simple charging structures that are capable of being understood by consumers.” This implies that not all advisers are yet acting in clients’ best interests.

Coincidentally, the Association of Independent Financial Advisers (Aifa) has just published its “manifesto for advice”.

Chris Cummings, Aifa’s ever-optimistic director-general, has a vision of his members going beyond selling lucrative pension and insurance contracts to a pro-bono role sorting out the public’s debt problems, private health insurance and even choosing a savings account – services which do not normally pay the commissions that are advisers’ lifeblood.

I applaud such altruism, and I have no doubt that such paragons do exist outside Cummings’s dreams. All the same, I’d love to hear from readers what sort of reception they get from IFAs who suddenly realise that they are not going to make any money out of them, at least not for some time.

william.kay@ sunday-times.co.uk