ICB Announces Proposed Financial Sector Reforms
Written on 15 Sep, 2011 at 06:30 by Jack Torrance
In his opening remarks, Sir John Vickers who chaired the report said that its reforms were designed to develop the financial sector into one which was more resilient against crises and more competent in its ability to provide services to the general public.
Among the key recommendations is the separation of the retail aspect from the investment element of banks by means of a ‘strong ring-fence’, in order to protect high street customers in the event of market difficulties. Other measures suggested include increasing the ability of banks to absorb losses and reforms designed to increase the level of competition in the industry.
Mr Vickers commented: “In many respects our recommendations would restore UK banking closer to how it used to be – with better-capitalised, less leveraged banking more focused on the needs of savers and borrowers in the domestic economy.”
Kevin Mountford of Moneysupermarket.com urged on the side of caution however, suggesting that the cost of the reforms could potentially hit the consumer’s pocket. "The main concern of these recommendations is the additional costs on the banking sector, which could either be passed on to customers in some shape or form, or see a number of banking operations moving their head offices away from the UK," he said.
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