Chancellor George Osborne has resisted calls to shorten the 2019 implementation date for the Independent Commission on Banking’s proposals.
Giving a statement on the ICB’s final report to the House of Commons yesterday, Osborne said the 2019 date was “sensible” because it matches the deadline for banks to comply with new capital requirements set out in Basel III.
He said: “The 2019 backstop is the considered view of John Vickers and his commission. They have put in an enormous amount of time thinking about this, trying to get the balance right between getting these rules in place and getting them right and making sure they do not damage credit supply. I think he has done a good piece of work, has given a lot of thought to these issues and I do not want to second guess him just hours after he publishes the report.”
Treasury select committee members, SNP MP Stewart Hosie and Labour MP George Mudie both suggested that implementation of reforms be sped up.
Hosie said: “Will the Chancellor ensure banks do not consider next eight years to be a hiatus during which they can return to business, and bonuses as usual? Will he also ensure he drives forward as many of these recommendations as he can as quickly as possible before the 2019 backstop.”
Mudie said: “Vickers suggests 2019 as a back stop, but the report makes it clear efforts should be made to complete it sooner. Does the Chancellor accept that recommendation?”
Osborne said the Government will publish a formal response to the report by the end of the year, legislate for the changes it accepts by 2015 and complete implementation by 2019.
Conservative MP Clair Perry said she welcomes the “cautious timetable” because in implementing the reforms, designed specifically for the UK, it was acting unilaterally.
Shadow Chancellor Ed Balls said the timetable was understandable given the complexity of the reforms but challenged the Chancellor to publish a detailed implementation plan with milestone dates alongside his formal response.
Seeking to disarm the Government’s line of attack that the review of banking structures should have been commissioned by Labour a decade ago, Balls told MPs he was “deeply sorry” for the part he and Labour played in the “global regulatory failure”.