Zombie banks!! Don't you just love them.

There seems to be more alarm over the Zombie banks in the United Kingdom than about the paying of RBS pensions to Fred the Shred and Lord Myners etc. It was thought that one of the main factors of the deflation or lost decade in Japan was the failure to clean up the balance sheets of the prinicipal banks. These were stuffed full of bad debts and stopped the Japanese institutions lending to businesses.
The situations are not strictly comparable in the sense that the Japanese property bubble was so big.
However, in the UK there is a marked reluctance of the main banks to confess to the full range of lending horrors. Negotiations between the UK Treasury and Lloyds Banking Group have stalled. The CEO of the British bank, Eric Daniels, is apparently trying to keep the state's shareholding at below 50 pct. He does not want to suffer the fate of Royal Bank of Scotland (RBS), which will be 95 pct owned by the UK Treasury.