Britain’s Independent Commission on Banking has released it’s final report, aka the “Vickers Report” — available here as a PDF — that looks set to have wide implications for British banks and consumers.
Here’s what you need to know.
- Banks should ringfence their “casino banking” elements from their high street banking.
- The reforms are moderate compared to those proposed by Vince Cable while he was in the opposition, but are still likely to cost £4 billion ($6.3 billion) and £7 billion ($11 billion) a year for the banks.
- The Guardian reports that £2 trillion ($3.17 trillion) of assets could end up inside the ‘firewall’, including all “high street banks”.
- Ringfenced banks will be required to have their own boards be legally separate from the other part of the bank. They will be required to have a capital “cushion” of up to 20%.
- Banks will have until 2019 to comply, in a bid to coincide with European-wide plans. George Osborne will legislate the plans soon, however, reports The Telegraph.
- Retail banking will be investigated by a competition commission in 2015.
The Guardian reports that the banks likely hit most will be Barclay’s and Royal Bank of Scotland. Lloyd’s will get some relief for the plan by being able to sell off an extra tranche of branches.
Bank shares are rallying after the report, with many seeing the delay as positive, reports The Telegraph.
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