19 Dec, 2011

The UK Chancellor, George Osborne, is thought to be set to announce that he will be implementing legislative moves to separate the retail and investment segments of banks, following the Vickers Report in the autumn.


This course of action was recommended by Sit John Vickers as a way to help protect retail banking customers from a downfall in the riskier investment arms of the banks. It was a report launched in response to the economic crisis in a bid to up protection for the banking public in the event of another one.


In relation, yesterday (18th Dec.), Vince Cable, the UK Business Secretary, told the BBC that ‘the government would accept the report in full’. Although, the BBC has since reported that the reforms that are actually implemented may be slightly different to what was initially announced.


According to the BBC, one of the recommendations states that the country’s biggest banks should have enough funds to use as capital to handle losses equal to ‘one-fifth of the size of their total balance sheet’. However, the BBC reports that due to a successful argument from HSBC that this may not be so clear cut, the implementation of this particular recommendation may be one that they will have to ‘water down’.



Picture: George Osborne

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