Independent Commission on Banking

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The Independent Commission on Banking (ICB, also known as the "Vickers Commission") is a five-member panel appointed by the U.K. government in 2010. [1] The commission, which is chaired by former Chief Economist of the Bank of England Sir John Vickers, issued its final report and recommendations on September 12, 2011. [2]

Summary

The ICB recommends that banks "ringfence," or separate retail banking operations from trading and investment banking activities. Ringfenced operations would be required to have a separate board of directors, and a 10 percent equity capital reserve. Among the goals and recommendations in the 363-page report:

  • the emergence of a competitor to the "Big Four" British banks - Lloyds, Royal Bank of Scotland, HSBC, and Barclays;
  • a "firewall" between a bank's retail and investment banking operations, with stricter capital reserve requirements than those of Basel III;
  • elimination of the implicit guarantee that taxpayers will bail out failed banks, which tended to "unduly encourage risk-taking by banks; and
  • regulations to improve competition and choice "to the benefit of consumers."[3]

To view the final report, click [HERE].

Commission Members

  • Sir John Vickers, professor of economics, Oxford; former Chief Economist of the Bank of England;
  • Clare Spottiswoode, chair of Gas Strategies;
  • Martin Taylor, chairman of Syngenta AG;
  • Bill Winters, former Co-CEO, JP Morgan; and
  • Martin Wolf, economics commentator at the Financial Times.

References

  1. UK Independent Commission on Banking Publishes Final Report. Clifford Chance.
  2. Vickers plan shakes up City. Financial Times.
  3. What the Vickers commission report will mean for banks – and the wider economy. The Scotsman.