Why the Vickers ringfence is no panacea

Author: | Published: 21 Nov 2012

Mark Field MP, Cities of London & Westminster outlines why the UK Treasury should look beyond the Vickers recommendation and consider a break up of investment banks from retail banks

The City of London’s size and global reach continues to make the UK economy especially vulnerable to turbulence in the financial markets. In a bid to reduce that vulnerability and avert future crises, the UK’s coalition government, soon after taking the reins in 2010, tasked an Independent Commission on Banking (ICB) with proposing reforms to Britain’s banking system.

Last autumn the Commission, under the chairmanship of Sir John Vickers, released its much anticipated final report. Its centrepiece was a plan to ringfence domiciled banks’ retail arms from their investment ones.

Based on the notion that what were perceived as the less risky retail operations required protection from the so-called casino excesses of investment banking, the reforms aimed to...