Banks to reorganise their retail divisions
Sir John Vickers and the Independent Commission on Banking said that banks should split their retail divisions from their investment divisions which are perceived to be much riskier.
The report calls for the reforms to be implemented by the start of 2019 at the latest.
However, while George Osborne has already approved of the report, it is likely that he will delay its implementation until further consultations have been carried out.
Most consumers don’t think that the banks (76%) or the Government (71%) have done enough to ensure there is no repeat of the financial crisis, according to research by Which?
And, with just 14% of people saying that the banks have learnt their lesson from the credit crunch, seven in ten consumers (71%) back the proposals to separate retail from investment banks.
Ring-fencing has been under concerted attack from some in the banking industry.
Seven in ten people (71%) are not confident that the Government will act in taxpayers’ interests when it considers reforms to the banking industry.
Which? has called on ministers to quickly set out a timetable for implementing the ICB’s recommendations.
Which? chief executive, Peter Vicary-Smith, said: “Consumers want to see a firewall between retail and investment banks so if there’s a repeat of the financial crisis the banking services they rely on day-to-day will be protected.
“The Government has a big choice to make on banking reform. It can act in the interest of taxpayers, consumers and the wider economy so that we all benefit from better banking services. Or ministers can act in the narrow interest of banks that want to use their retail customers’ deposits to fund their risky investment businesses
“By immediately putting in place a timetable for meaningful reforms, the Government can reassure the public that banks haven’t been let off the hook.”