The Turnbull government now faces a desperate calculation. The political damage from a successful vote in the House of Representatives to establish a banking inquiry would be massive -- perhaps even existential. Not merely would it erase all of the political capital the government has invested in staving off a royal commission, it would be a ferocious blow to what's left of the authority of the Prime Minister. And the chances of a successful vote have increased significantly in recent days as disgruntled Nationals pursue a combination of longstanding anger at bank misbehaviour and a desire for revenge over marriage equality.

Multiply the increased probability by the huge damage and you get the grim conclusion that the government needs to change tack on the issue, whether it wants to or not. It's time for the government to establish a banking royal commission.