BBA calls for banking reforms to be delayed

The British Bankers' Association has called for the Independent Commission on Banking's proposed reforms to be delayed until the economy has recovered and taxpayers have been repaid for bailing out the banks.

Angela Knight, the BBA's chief executive, said markets and economies were now more fragile than when the ICB published its preliminary report in April, and imposing costly reforms on lenders risked denting confidence and cutting the supply of credit to the economy.

Ms Knight said: "We have a high degree of uncertainty, market turbulence and lack of confidence that governments in other countries have got a sufficient grip on their economies. We are in for a very difficult autumn.

"This is therefore the time to concentrate on economic recovery and paying back... the government and taxpayers. By all means think about new regulation but now is not the time to add that as an overlay with respect to costs, uncertainty or whether it is going to do anything beneficial anyway."

The BBA's intervention comes two weeks before the ICB publishes final plans for increasing stability and competition in UK banking. It will then be up to the Chancellor, George Osborne, to decide whether and at what pace to implement any reforms. The commission's main proposal was to "ring-fence" retail and investment banking operations to separate essential functions from trading. The ICB did not say how it would make the separation and the banks are anxiously awaiting details.

Ms Knight said the ICB must set out options with its workings so that proposals can be debated, a process that could further slow implementation. "Before any formal actions are made, what one requires is a series of options including things that are already in train such as the new Basel rules, European requirements and recovery and resolution plans and the costs and impacts of a series of options put forward by the ICB. Then there is a debate about a series of options – what can we put to one side, what shouldn't be done at all and what has been done already."

With the share prices of Royal Bank of Scotland and Lloyds Banking Group languishing well below the prices the government paid for its stakes, deferring the ICB's changes until taxpayers have been repaid could take years. Ms Knight denied the BBA was using the argument to ward off reform.

The Chancellor faces pressure within the Coalition to be tough on banks. The Business Secretary, Vince Cable, recently renewed his call for lenders to be split up so that retail and investment banking do not sit under one roof.

Colin McLean, chief investment officer at SVM Asset Management, said: "The Coalition wants to change the retail banking model but there has been a degree of regulatory forbearance going on recently. The [ICB] will be robust and not easily swayed politically, but its proposals might not all be implemented afterwards."

PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Business Development Manager – Frankfurt – Asset Manager

Negotiable: Selby Jennings: Business Development Manager – Frankfurt – Asset M...

Selby Jennings: Leveraged Finance - Senior Associate - International Bank - Frankfurt

Competitive + bonus: Selby Jennings: My client, a growing European CIB are loo...

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible