Dated: 19 December 2011
In an initial response to the Chancellor of the Exchequer’s statement on the Independent Commission on Banking report, Graeme Leach, Director of Policy at the IoD, said:
“We had mixed feelings about the final report from the ICB and we have mixed feelings about the Chancellor’s statement as well. We strongly support the measures aimed at improving competition in high street banking. High street banking desperately needs new entrants and this should be good for companies and consumers. The long timetable for implementation, stretching out to 2019, is also helpful. The last thing the economy and banking system need at present is an aggressive recapitalisation, with all the negative consequences for the money supply that would entail. Banks have enough to cope with at present from the euro crisis and any banking reform has to be mindful of this Sword of Damocles hanging over us”.
He added:
“Where we are less enthusiastic about the ICB report and the Chancellor’s statement is with regard to the impact of ring fencing. There must surely be doubt as to whether the ‘too big to fail’ problem has been solved. We remain sceptical that a major investment bank would be allowed to go down with no rescue attempt by the Government. The taxpayer is still on the hook.”
