The government has today published a White Paper setting out proposals to fundamentally reform the structure of banking in the UK.
The government has today published a White Paper setting out proposals to fundamentally reform the structure of banking in the UK. The White Paper, which details how the government will implement the recommendations of the Independent Commission on Banking (ICB), offers further detail on plans to separate retail and investment banking through a ‘ring-fence’ and increase competition in the banking sector. It sets out proposals to make banks more resilient, as well as making them simpler to resolve in the event of failure.
In an oral statement to Parliament, Mark Hoban, Financial Secretary to the Treasury, said:
Our proposals are ambitious in scale, but balanced in impact. They promote financial stability while supporting sustainable growth and the role of the UK as the world’s leading international financial centre.
The Secretary of State for Business, Innovation and Skills, Dr Vince Cable, said:
This government is delivering a major piece of reform. We are leading the world in establishing the principle that investment banks should be separated from traditional banking, as part of a regulatory system in which the public do not subsidise banks and banks are allowed to fail without a threat to the system at large. The necessary changes to the ring fence will be completed in this parliament.
Draft legislation will now follow in the autumn and the White Paper reconfirms that all legislation will be in place by the end of this Parliament in 2015.
Notes for Editors
It is open for consultation until 6 September 2012.
On 16 June 2010, the Chancellor of the Exchequer and the Secretary of State for Business announced the creation of the ICB, to be chaired by Sir John Vickers. The Commission was asked to consider structural and related non-structural reforms to the UK banking sector to promote financial stability and competition, and to make recommendations to the government by the end of September 2011.
The ICB published its report on 12 September 2011, which can be found on the ICB website, and the Government published its response - which was open for consultation until March 2012 - in December 2011.