BY NOE GANDILLOT

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Three years after near financial collapse by British banks -- the leader of an independent commission says -- never again.
Independent Commission on Banking John Vickers talks about a report calling for far-reaching measures to prevent another taxpayer bailout of the system. He tells the BBC :


“Future stability requires that UK banks should have more equity capital and truly loss-absorbing debts (...) It also required that retail banking activities should be separated by a ring-fence from wholesale and investment banking activities.”


So -- the key proposal involves keeping “regular” banking separate from investment banking. The British government has welcomed the Commission’s proposed changes. As did the Guardian :

“Britain's banks face the most radical overhaul in decades … [and would] force through the first major changes to the structure of the industry since the 2008 financial crisis.”

But the Guardian also notes, some critics have concerns about the report’s timeline --  if approved the reforms will take until 2019 to implement. The Daily Mail agrees that’s far too long :

“The sad truth is the banks have been given so long to implement these changes that the report's goals are almost meaningless. Given the current, turbulent state of the global economy and international finance it is impossible to predict what will happen tomorrow, let alone nine years on from now.”


The plans will cost the industry 7 billion pounds -- or about 11 billion U-S dollars.
Which -- The Telegraph notes -- is likely to be passed to consumers -- and could end free banking in the UK. A London banker tells the paper :

"This report essentially takes free banking outside and shoots it in the back of the head. It seems clear to me that the model is unlikely to survive these changes as the additional costs that are being placed on the banking industry will have to be taken somewhere."


The Economist disagrees.  Normally a free market advocate, it says the Independent Commission did well-balanced work:


“The Commission has clearly tried to balance its competing interests of making banking safer while still allowing British banks to compete in global capital markets.”


























The Financial Times says the City is facing massive upheavaland the changes will cost the banks up to £7bn.

These costs are likely to be passed on and

The Commission’s conclusions were welcomed by both Government and opposition. UK Chancellor George Osbourne found the report “very impressive”, as He explained The Telegraph





http://www.economist.com/blogs/newsbook/2011/09/vickers-report


The report said the plans will cost the industry as much 7 billion pounds (11 billion dollars) The Telegraph points out that these costs are likely to be passed on and could end free bankingin the UK :  

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8758649/ICB-bank-reforms-Sir-John-Vickers-measures-could-end-free-banking.html

One London-based banker put it more explicitly, saying: "This report essentially takes free banking outside and shoots it in the back of the head. It seems clear to me that the model is unlikely to survive these changes as the additional costs that are being placed on the banking industry will have to be taken somewhere."


($11 billion),

http://blogs.telegraph.co.uk/finance/andrewlilico/100011889/sir-john-vickers-banking-report-some-improvements-on-the-interim-report-but-one-continuing-major-lacuna/

http://www.dailymail.co.uk/debate/article-2036520/Sir-John-Vickers-banking-report-Theres-excuse-dangerous-delay.html
All of these are laudable goals. But the sad truth is the banks have been given so long to implement these changes - which do not have to be completed until 2019 - that the report's goals are almost meaningless.
Given the current, turbulent state of the global economy and international finance it is impossible to predict what will happen tomorrow, let alone nine years on from now.


http://www.guardian.co.uk/business/2011/sep/12/vickers-report-banks-given-until-2019

http://www.bbc.co.uk/news/world-14880560

http://www.ft.com/intl/cms/s/0/7321c692-dd16-11e0-b4f2-00144feabdc0.html#axzz1Xr1T4mqg

The plans will cost the industry as much 7 billion pounds ($11 billion), the report said


http://news.sky.com/home/business/article/16067454
Economists and business leaders have warned the changes could impact on the UK's economic growth as the banks are likely to increase the cost of lending to offset implementing the reforms and some may consider leaving the UK.



In any future banking crisis, the British taxpayer should be "right off the hook". A long-awaited report on bank reform

Independent Commission on Banking

Banks more accountable for the risks they take in order to protecting the taxpayer.
In substance, these are the recommendations made by the long- awaited

The head of the Independent Commission on Banking, Sir John Vickers, has said its long-awaited report on bank reform should get the taxpayer "right off the hook" in any future banking crisis.
The report calls for far-reaching measures to shield ordinary customers from riskier investment banking.



Transcript by Newsy.