Independent Banking Commission has the backing of Chancellor Osborne



George Osborne Plans to Implement Recommendations of Sir Vickers Commission

George Osborne Plans to Implement Recommendations of Sir Vickers Commission

According to today’s Financial Times, Chancellor George Osborne believes the Independent Banking Commission is “going in the right direction” with its recommendations on banking reforms.

Chancellor Osborne is very happy with the direction of Sir Vickers commission – said an Treasury aide to the newspaper adding that any thought of the banks that the commissions recommendations will not be implemented is nothing but ‘wishful thinking’.

Sir Vickers had said in a speech in January that the commission at looking at “ring-fencing” retail banking and suggested that some kind sort of isolation is required to separate retail banking from investment banking.

“The question I want to raise is whether and, if so, how structural reforms might relate to other reform activities, especially those to enhance banks’ capital structures and the credibility of their recovery and resolution plans to cope with crises”, he said.

Arguing in favour of a separation mechanism, he added “credible resolution would seem to require some sort of separation…but perhaps the credibility of resolution plans can be ensured otherwise than by forms of separation, and the benefits would of course need to be weighed carefully against costs”.

Bank of England governor Mervyn King had previously advocated in favour of a separation mechanism between retail and investment banking segments. “The concept of too big to fail should have no place in a market economy”, he had said to the Daily Telegraph in an interview last week.

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