As so often has been the case, Great Britain is once again leading the way.
Sir John Vickers, head of the U.K.’s commission on banking reform, is making it clear thatToo Big to Fail’s days are numbered.
And the change can’t come soon enough. Following Iceland’s financial collapse, Britain’s economy arguably became the world’s most overbanked, and thereby vulnerable to an even greater systemic financial crisis than our most recent one.
The City of London is home to three of the world’s five largest banks by assets (Royal Bank of Scotland, HSBC, and Barclays), and the total assets of the U.K.’s banking sector are approximately 5X the size of the nation’s GDP (Iceland’s banks’ were 10X before its banks collapsed).
We wish Vickers luck with his efforts to put a stake through the heart of ‘Too Bigger to Fail‘ as it won’t be easy sailing. Encouragingly, Sir John has proven himself to be capable of driving controversial and difficult institutional change; previously he was responsible for eliminating the notorious three hour exam on a single word at Oxford’s ultra traditional All Souls College.
And we further hope that England’s former compatriots across the Atlantic are taking note, for Britain can’t do this alone. International cooperation and solidarity are crucial to solving this problem.