ICB Final Report on Banking Reform is Here

It’s here! Today’s the day the Independent Commission on Banking were due to publish their final report on banking reform, and true to their word,  they have delivered the goods right on cue.

Sir John Vickers and the other commissioners must have been up bright and early, because by the time I got up this morning and switched on my radio to listen to the BBC’s Today program he was already being given a grilling by John Humphrys. 

As the Commissioners explained in the Interim Report which appeared back in April this year, their aims are to create a more stable and competitive basis for UK banking in the long term. They want to see a more robust banking sector, able to withstand the impact of any future global financial shocks and deal with them without any risk to the public finances. 

Key to these goals are protecting customer investments by ring-fencing personal accounts from investment banking activity, and increasing competition between banks.

The Commissioners acknowledge the UK’s unique role as a leading centre for banking and finance, and aim to maintain and strengthen this position by supporting and enhancing the international banking reform measures arising from Basel III and European Union initiatives.  Not only do the Commissioners support the international reform agenda, they believe it does not go far enough, and are advocating higher equity requirements for banks with national systemic importance.

Speaking on the Today program, Sir John warned that the proposals are ‘fundamental and far-reaching’, and are likely to cost Britain’s banks between £4 billion and £7 billion to put into place. UK Chancellor George Osborne has already confirmed that the British government will enact legislation to ensure the Commissioners’ recommendations are implemented in full, but bankers can take some comfort in Sir John’s assurance that they will have until 2019 to make the changes. 

The full text of the report is now available on the ICB website.