John Vickers: 'We didn't bottle it on reining in risk-takers'

15 April 2011 12:00 pm | By Natalie Holt

The Independent Commission on Banking has dismissed suggestions that the commission has “bottled it” and failed to go far enough in its suggested reforms of the sector.

This week, the ICB published its interim report on bank reform. In London on Monday, chairman Sir John Vickers den-ied that the commission should have gone further to rein in banks’ risk-taking.

Vickers said: “I absolutely reject any notion that we have bottled it. I would stress this is an interim report but reforms along these lines would be very far-reaching. A package of these measures would make a world of diff- erence to UK retail banking. In no sense are these half- measures.”

There had been calls for the commission to consider a strict separation between retail and investment banking, including from Bank of England governor Mervyn King and Business Secretary Vince Cable.

The commission is recommending increased capital requirements, that Lloyds Banking Group should sell more of its assets to boost competition and making it easier to switch accounts.

Vickers said: “With capital requirements and the other measures of the kind laid out in this report, could the Royal Bank of Scotland have purch- ased ABN Amro? I very much doubt it.”

But Jamieson Financial Management principal Bruce Jamieson believes the commission could have recommended more radical measures such as forbidding the sale of loanbooks and ensuring that senior bank management have appropriate financial qualifications.

“He says: “The commission totally bottled it. It is almost certain that it was leant on by the banks. The trouble is the banks do not want any separation of retail and investment banking.”

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