As ever, the politicians think it's all about them. In the corridors of Parliament, nobody really cares anymore about the future or reputation of Barclays plc. No one can muster even the faintest concern about the future or reputation of British banking itself. Instead, senior politicians from the government and opposition benches point fingers at each other, coming ever closer to calling each other "liar" -- a word banned by ancient tradition as "unparliamentary language." Then they look for ways not to apologize, when proved wrong.

Yet whether it was the previous government that tolerated and perhaps tacitly encouraged the banks' reckless behavior, or the current government, which professes to favor tough regulation and reform even as it defends banker bonuses from attacks by its European Union partners, the bottom line is the same: Grandstanding has taken the place of analysis and action.

Yet back in the real world, where the posturing of politicians and the actions of bankers have real consequences, the furor over Barclays' manipulation of LIBOR has unleashed new pressures for change. The media have begun to speculate about the breakup of Barclays, although little is likely to happen until the bank appoints a new board. The resignation of CEO Bob Diamond and the imminent departure of the chairman, Marcus Agius, have left Barclays poorly placed for momentous decisions.

At the same time, policymakers may look again at enforced separation of "good" retail banking and investment, or "casino," banking, perhaps by the introduction of some kind of Glass-Steagall Act for the post-crisis era.

Such pressures could as easily prove the catalyst for value destruction and institutional wreckage as an opportunity for renewal and cultural change. No doubt the biggest (mainly U.S.) private equity firms would relish the opportunity to put money to work -- though they did not cover themselves in glory in the banking field during the crash. Maybe some of the bigger banks -- to say nothing of lawyers and rival investment bankers looking for fees -- would love a piece of the M&A action. Goldman Sachs Group Inc. must be drooling at the thought of buying up what had until recently been known as Barclays Capital, the investment unit of the British bank; JPMorgan Chase & Co. might relish a run at Barclays' retail business. Perhaps a breakup would spread wider, forcing HSBC Holdings plc to shrink or divest its more limited investment banking operations.

Government ownership has already forced Royal Bank of Scotland Group plc to shrink its international operations and focus on the U.K. retail and commercial banking market. Maybe, though not very likely, Germany and France would follow suit, forcing the breakup of such universal banking giants as Deutsche Bank AG or Société Générale SA.

But poor regulation, as well as incompetence and greed, could easily distort the outcome. That much should be obvious to anyone who has observed the antics of politicians, regulators and bankers on both sides of the Atlantic -- and on both sides of the English Channel -- over the past five years. Half a decade after the bubble burst, the world is either struggling with hurried, bungled regulation or still debating its options. The U.K. should also ask itself whether it really wants to break up its last global universal bank at a time when diversified financial services are still such a big driver of the nation's exports.

The good news, in Britain at least, is that a blueprint for measured change is already on the table. Nine months ago, the Independent Commission on Banking proposed to ring-fence the retail and commercial banks from the riskier activities of their investment units, in a kind of Glass-Steagall-lite.

The ICB recognized that the universal banking model was in itself not the problem. Northern Rock plc, which was nationalized in February 2008 after its near collapse sparked the first run on a U.K. bank since the 1860s, had no investment banking activities, but funded too much of its mortgage lending with short-term wholesale borrowing. At the other extreme, Lehman Brothers Holdings Inc. was a pure investment bank, with no retail arm.

The ICB proposals focus on protecting retail clients from the risks of investment banking and protecting the taxpayer from the consequences of banking failure. Rather than force banks to demerge completely, with huge risks to the funding of the retail operations, ring-fencing would allow investment banks to cross-subsidize the consumer operation but not permit retail banks to underwrite the investment bank's losses.

The British government has said it will largely follow the ICB's proposals but has recently seemed to be letting matters drift. Maybe the Barclays fiasco will now stiffen the government's resolve.