How big is the banking black hole?

The mess that the UK's big banks got into is very well documented.

The trouble they are still in is less well understood.

At the end of December 2012, the Governor of the Bank of England suggested that there was a black hole as big as £60 billion still in the banking industry - toxic loans that the banks will never see repaid, underestimates of how much compensation banks will have to pay for past mistakes, or costs not yet fully understood from new rules and regulations.

But he refused to be more specific about the size of the problem, or to identify which banks were still in the worst shape.

He said that the problem did need action but was "manageable", but made clear that he wanted the banks themselves to be more honest.

Later, not the banks themselves, but the Bank of England's new Financial Policy Committee (FCP), is due to reveal exactly how big that problem is.

Sir Mervyn claimed that the size of the black hole was anything between £24 billion, right up to £60 billion, almost as much as we all paid to bail RBS and Lloyds out in the first place.

I understand they will say that the black hole is not as big as the £60 billion. But it is still likely to be a significant chunk of cash - it is likely they will say the true figure is somewhere in the middle of that range.

The banks, five years on from the crash, are still heavily weighed down by the costs of what went wrong.

The problem for the rest of us is that it is hard for the rest of the economy to flourish if the banks are still not working properly.

The FPC report will help show just how far they are from getting a clean bill of health.