19 December 2011
The banks' Secret Santa
Ross Haig
Communications Officer
In fully accepting the proposals of the Vickers' Commission, George Osborne has handed the banks a sackload of early Christmas presents.
Yesterday's not-so-festive announcement by the Chancellor shouldn't mark the endpoint of bank reform. While the fact that Vickers' recommendations have been accepted in full rather than being watered down is a positive, we shouldn't forget that his Commission didn't go far enough in the first place.
- By failing to put an end to the 'too big to fail' problem, the whole system remains dangerously unstable.
- Until recently Vince Cable and other senior Lib Dems have called for full separation of investment and retail banking - Vickers falls short and instead recommends a flexible ringfence.
- These reforms will only begin in 2015. If anything goes wrong before then, it's taxpayers who will foot the bill.
So it's a merry Christmas for the banks, but the rest of us will have to wait for our present of choice - a better banking system.
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