Tyrie calls on banks to reply to ICB proposals

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The Independent Online

The chairman of the Treasury Select Committee has called for banks to reveal their responses to the Vickers commission's proposals amid concerns their lobbying could weaken the reforms.

Andrew Tyrie, the committee's chairman, has repeatedly called for the debate on proposals by the Independent Commission on Banking (ICB) to be held in public so the reforms have legitimacy. He has pledged to go public if the banks fail to present their arguments.

Mr Tyrie said: "There should be no deals behind closed doors or behind-the-scenes pressure. Where there are good arguments, we should hear them.

"Let's see what the banks come back with. If they come back with a nil return I will state publicly that we asked the banks for their further responses and the answer is none and their position is considerably weakened."

Banks with investment banking arms, such as Barclays, Royal Bank of Scotland and HSBC, are opposed to the ICB's main proposal to ring-fence retail banking from volatile trading operations.

Sir John has called on the Government to legislate quickly to pass all his proposals to stop them being diluted over time by the banks' lobbying efforts.

The Government is aiming to respond to the ICB's proposals by the end of this year, giving the banks time to press their case that the reforms could reduce the supply of credit, increase borrowing costs and undermine the City as a financial centre.

The Treasury Committee helped to bring the banks' arguments out in the open by grilling their bosses and demanding publication of written responses to the ICB's interim proposals.

Mr Tyrie said many of the views the banks put forward were taken into account in Sir John's final report and that the final document was "an extremely thorough and intelligent piece of work".

He said: "There's a lot for the banks to digest, although they have now been on it for some time and within a few weeks we should be able to get something before the next hearing."

The committee has called Sir John Vickers and his fellow members of the (ICB) to give evidence on 10 October.