At 7.30 every morning, the huge wooden doors swing open and Edinburgh's professional classes slowly begin to drift into Centotre. This city centre bistro has become a breakfast-time institution, a place where bankers, lawyers and property developers can take stock of the day ahead over cappuccinos and almond croissants before the cut and thrust of business kicks in.

Victor Contini, Centotre's proprietor, prides himself on the welcome that his customers receive. He knows his regulars by name, and has learnt to recognise their moods. And what he's seen in the past month has alarmed him.

“People are worried, they're downbeat, they're unhappy,” Mr Contini said. “There is uncertainty — will they keep their job? For a lot of them, nothing seems to be happening. In the big development deals the money just isn't there. People don't know what the future holds and that's the frightening thing for them.”

Yesterday the mood was bleaker than ever. Before Mr Contini had even warmed the milk for the first round of coffees, Edinburgh's two greatest financial institutions, the Bank of Scotland and the Royal Bank of Scotland, had effectively been nationalised. Some 300 years of independent banking tradition in the city had ended.

For many of the banks' head office employees — there are some 9,000 in this city — the future is uncertain. Already the effects of a new management regime are being felt by some regulars at Centotre.

One of the customers is in management at RBS. She said she had received a memo saying that all company-funded Christmas parties had been cancelled. This year, any staff who wish to celebrate will have to find the money themselves.

That has a knock-on effect in the food and drink business, and any restaurateur in Edinburgh who says he hasn't felt the effects is lying, Mr Contini said. The gossip in the trade is that you even can ring a Michelin-starred restaurant such as Martin Wishart on a Friday night and book a table for that evening, or easily make a booking at Gleneagles Hotel. “If it's true it's unheard of,” Mr Contini said. “Normally you'd be talking weeks or months to get a table in places like that.”

But it's the fate of the Royal Bank of Scotland's former chief executive, Sir Fred “the Shred” Goodwin, that figures largest in conversations in the café, which sits in a former branch of the Bank of Scotland. Hilary Duncan, a teacher from Morningside, wonders whether Sir Fred was really worth all the money he was paid. “People like Sir Fred have had huge bonuses and lived very comfortable lives. Did they have to earn that amount of money. Were those huge salaries really necessary?” she wondered.

“It's been an accident waiting to happen. Maybe now they'll have to look at the bonuses,” agreed her friend, Mandy Arthur, from Glenfarg.

Norman Taylor, from Hawick, believed that the UK Government had done the right thing by pouring its money into Britain's biggest banks. “We are between a rock and hard place. There is nothing else to do. What's caused the mess is bankers who are too greedy, who have been allowed to do what they like - which is make money at all costs. And the costs will unfortunately hit the wee guys much more than the bigger guys,” Mr Taylor said.

Only Bryan Johnston was upbeat. A director of Bell Lawrie, a financial services company, he said that Monday, 13 October was a seminal day. “It's a big change and the Government has taken some courageous decisions,” he said. “But it is not the end of the world. Markets change and adjust and adapt. A lot of people's jobs and futures will be secure now.”

Mr Contini was not quite so upbeat - but he has learnt to be phlegmatic. “We'll come through it. Some people will get scarred, but hopefully we'll all come out more knowledgeable and better people. Things will change, no doubt about that,” he said.

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