News story

Reform for UK Banking

Government publishes its response to the report by the Independent Commission on Banking (ICB).

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


The Government has set out its plans to fundamentally reform the structure of banking in the UK.

This response agrees with the ICB’s recommendations and outlines how the Government will legislate to create a stable banking sector that supports lending to businesses and families, and removes the implicit taxpayer guarantee in the event of a bank failure.

Business Secretary Vince Cable said:

“Sir John Vickers has produced a comprehensive plan to give the UK a more stable banking system that removes the implicit taxpayer subsidy. We will take forward a full programme of reform with legislation in place to implement the ring-fence by 2015.

“The potential costs of an unsafe banking system are clear to everyone. Our reforms will protect taxpayers from the riskier aspects of banking and boost competition without harming the ability of UK banks to lend, to invest and to compete.”

The Government will implement the ICB’s advice in stages with the full package of reforms completed by 2019.

All necessary legislation will therefore be put in place by the end of this Parliament.

A White Paper will be published in spring 2012. It will set out how the ICB recommendations will be taken forward. In advance of that, the Government is open to views on how to implement these plans.

Today’s response is open for comments until March 2012.

Published 19 December 2011