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MPs want ICB to review retail banking total split

The Treasury select committee is concerned that the Independent Commission on Banking has not given enough consideration to a total split of retail and investment banking.

The ICB’s interim report, published in April, proposed ringfencing retail banks within wider banking groups and making them hold at least 10 per cent core tier-one capital.

The TSC’s report on the commission’s work so far, released last week, says the “thin” coverage of a total split between retail and investment banking is “not a convincing demonstration” that it has been given full consideration.

It says: “We call on the ICB to provide further details as to the costs and benefit of this reform option and why it decided early against full separation when settling its lead option at the time of its interim report.”

The report stresses the committee does not back any particular option, calling for more detail on all the options it is looking at to be included in the ICB’s final report, due in September.

It says: “Much greater detail is required on the work done by the ICB on all the options. We urge the ICB to come up with a more detailed analysis of the costs and benefits of various forms of ringfence with robust estimates of the costs to banks and the social costs and attempt to secure some measure of agreement with the banks on these figures.”

TSC chair and Consevative MP for Chichester Andrew Tyrie says: “Only when all of this information is available will the commission’s proposals command support, not only of the banking industry, but also of everyone who depends on it.”

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