Lord Myners launched a scathing attack on the Vickers Commission's proposals to reform the banking sector yesterday, criticising its report for "lazy" evidence and for its failure to examine radical solutions.
As bankers attempted to get their heads around what he called "the horrendous loss" announced by UBS, the former City minister took the floor of the House of Lords to compare the report to a Chinese dinner. "I felt quite full after I first read it but within a short period I became hungry again," he said.
Sir John Vickers was charged with coming up with ways to reform the system after it came perilously close to collapse during the credit crunch. But Lord Myners, who was in office in 2008 when parts of the sector had to resort to state help, said there was "a massive lacuna in the report", which proposed ring-fencing retail operations from investment banks.
"Vickers spends no time at all examining the causes of the collapse of the banking system... He does not examine radical solutions," he said, adding: "He is strong on assertion but weak in evidence, and frankly lazy in one particularly important piece of evidence." The evidence in question, he said, was the assessment that the proposals would cost UK banks £4bn to £7bn a year.
"Where did Sir John get this figure from? Amazingly, he got it from investment bank analysts," Lord Myners said. "He simply averaged the number produced by investment bank analysts, which were guesses not forecasts ... based on trying to anticipate what Vickers was going to propose."
In a damning verdict, he said: "In many respects, the [Commission] has simply swallowed hook, line and sinker the lines produced by the bank lobby on the importance of credit and the banks in supporting the economy."
He also countered the banking lobby's claims over job losses. "They are not, on the whole, the jobs of ordinary folk," he said. "The jobs that would potentially be at risk from Vickers if he had come up with radical solutions are those of international bankers and speculators."Reuse content