Ben Chu: How far and how fast is key to the reforms

The commission said that high street depositors should be first in line to get their money back if a bank goes bust

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There have been numerous new banking rules and financial regulatory frameworks introduced over the past four decades. Each one has been presented by politicians as a way to make banks safer. And yet we have, today, a global banking sector that is riskier and more fragile than ever. We should look to details, not headlines, when evaluating reforms. And the detail of today's response from the Government to Sir John Vickers' commission on banking needs to be especially closely scrutinised.

The Government has already said that it intends to act on the main recommendation and impose a ring-fence around the high street banking arms of our giant banks to prevent them being contaminated by losses incurred in banks' "casino" speculation arms. But how high and wide will that ring-fence be? Will it be a Berlin Wall? Or a Maginot Line?

Vickers also said that UK banks should be forced to hold more capital. The Government has said it intends to implement this too. But will the Chancellor go for the 17 to 20 per cent capital buffer for our largest financial institutions recommended by Vickers, a suggestion that has prompted howls of fury from bankers? Then there is protection for ordinary savers. Vickers said that any high street depositor should be first in line to get their money back if a bank goes bust. The banking lobby complained that this would deter big companies from putting their savings in banks. Will the Chancellor side with the banks or Vickers on this point?

The timing is crucial too. Vickers recommended that safeguards be in place by 2019. But as Robert Jenkins, of the incoming super-regulator, the Financial Policy Committee, has pointed out, this permits seven years of ingenious evasion planning by bankers. If the Chancellor is serious about making the British public safe, he will make it clear that the reforms be implemented without delay.

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