The Government's paper on how to reform the financial system is due to be published at 12.30pm today.

Downing Street insiders have made it clear that the paper will contain limited concrete proposals for change, with most of the document framed as a series of questions to be debated by the Government, regulators and the banking industry over the next few months.

What should banks and consumers expect to see?

Too big to fail

The Government has rejected the idea that banks must be stopped from growing so big that they cannot be allowed to fail because of the catastrophic impact that would have on the financial system.

The Treasury's answer will be to make large international banks reorganise their structure around their different businesses, such as putting all of their retail bank into one entity. The aim is to make banks more transparant so that they are easier to wind up in an orderly way if they get into trouble.

The Government also hopes this system will mean that it would be easier to make the deposit-taking arm — where customers are guaranteed compensation in the event of a failure — "bomb proof", while the riskier investment banking side could be allowed to collapse.

Another Glass-Steagall Act?

Some commentators want to see the Government introduce a modern-day version of America's Depression-era law that divided investment and retail banks.

The Government thinks it would be impossible to impose such a split now as banks carry out a wide range of transactions for customers.

As with the "too big to fail" question, the answer here will be to force banks to reorganise themselves internally. The Government will warn banks' shareholders and creditors that should the investment banking division of an organisation fail, there will be a significant risk that taxpayers will not bail them out.

Bankers' pay

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