Independent Commission on Banking calls for evidence
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The Independent Commission on Banking has published an issues paper calling for submissions from interested parties about its focus and approach to improving the banking sector.
The commission has been asked to consider structural and related non-structural reforms to the UK banking sector to promote financial stability and competition. It will make recommendations to the Government by the end of September 2011.
The paper describes the initial options set out by the commission for reform to the structure of banks, including separating retail and investment banking and introducing narrow banking and limited purpose banking. It also considers limits on proprietary trading and investing, structural separability, including living wills and resolution schemes, contingent capital and structure-related surcharges.
The commission also looks at how to reform the structure of markets, including measures to reduce market concentration and market infrastructure reform.
The commission says it has not moved towards any particular options at this stage.
It is inviting views and evidence on a number of questions raised in the issues paper including the benefits, costs and feasibility of the options above and whether there are other options the commission should examine.
Commission Chair Sir John Vickers says: “Experience shows that the risks from not asking hard questions about financial stability and competition are far greater than from doing so.
“Questions about the structure of banking need to be debated in an open, rational way and we would like to invite anyone with an interest to provide us with views and evidence.”
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Readers' comments (4)
Evan Owen | 24 Sep 2010 1:37 pm
How many times was the word 'commission' used in this piece?
I am sorry but it is impossible to have an open and rational debate about banking when consumers are not first in the queue to be asked what they need from a bank.
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Leslie Squires | 25 Sep 2010 9:08 am
Evan Owen is right, the consumers should be placed first in the queue. Thank goodness that constructural reform of the banking sector including proprietary trading and investing is at long last being considered. The FSA should have done this years ago!
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Crazy gang IFA member | 25 Sep 2010 8:43 pm
Sounds all sounds very woolly and politically driven if you ask me. Lots of nice catch words.
Limits on proprietary trading - I think this happens already, following the Nick Leeson affair.
If they want answers to the rest of these questions, they need to phrase them in English. I think simple Corporate Responsibility and accountability comes into this whole question and yes they do need to be able to set aside reserves to cover contingent liabilities and to stop investing people's money they do not have into intangable investments that do not actually exist (a bit like buying a property off plan and then finding out the development has been shelved, very common in Dubai I am afraid)
lets not throw out the baby with the bathwater though.
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Julian Stevens | 27 Sep 2010 11:05 am
The first set of evidence at which the Commission should look is the proportion of all complaints referred to the FOS which are attributable to the retail arms of the banks. If that doesn't tell the commission where it needs to focus its attention and prompt the clear and decisive action from which the FSA continues to shy away for so long, then the entire exercise will be just another waste of time and money. Having gathered and considered this evidence, the Commission needs to ask the Treasury just why it keeps telling the FSA to look the other way and make itself look busy by kicking the crap out of the IFA sector instead. Issue No. 1 on the Commission's agenda should be that of bias and corruption.
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