Independent Commission on Banking ICB: Structural seperation should help insulate retail banking from external financial shocks
* Concluded that the best policy approach is to require retail ring-fencing of UK banks, not total seperation
* Retail and other activities of large UK banks should both have primary loss absorbing capacity of at least 17-20%
* UK banking competition would be improved by creation of a strong new challenger by way of Lloyds divestiture
* Recommends govt seek agreement with Lloyds to ensure branch divestiture leads to the emergence of a strong challenger bank
* Banking services that are imperative for individuals and small business must be within ring-fence
* View is that setting 2019 as final deadline for full implementation provides ample time to minimise any transition risks
* Recent turmoil is not a reason for avoiding banking reform
* Services to non-Europe customers, trading book activities should not be within ring-fence
* Secondary markets activity, derivatives trading should also not be within UK banking ring-fence
* Plausible range for the annual pre-tax cost to UK banks of its proposed reform package is 4-7 bln
* Corporate deposits, lending to large companies outside the financial sector can be within ring-fence, but not required.
* Concluded that the best policy approach is to require retail ring-fencing of UK banks, not total seperation
* Retail and other activities of large UK banks should both have primary loss absorbing capacity of at least 17-20%
* UK banking competition would be improved by creation of a strong new challenger by way of Lloyds divestiture
* Recommends govt seek agreement with Lloyds to ensure branch divestiture leads to the emergence of a strong challenger bank
* Banking services that are imperative for individuals and small business must be within ring-fence
* View is that setting 2019 as final deadline for full implementation provides ample time to minimise any transition risks
* Recent turmoil is not a reason for avoiding banking reform
* Services to non-Europe customers, trading book activities should not be within ring-fence
* Secondary markets activity, derivatives trading should also not be within UK banking ring-fence
* Plausible range for the annual pre-tax cost to UK banks of its proposed reform package is 4-7 bln
* Corporate deposits, lending to large companies outside the financial sector can be within ring-fence, but not required.
Tags: ibc, icb, icb report, vickers report
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