The Association of Corporate Treasurers (ACT) is pleased to see that the Independent Commission on Banking (ICB) has been practical and balanced in what it has proposed in today’s final report. The recommendations propose relatively small changes in the context of other regulatory changes for banks and markets following the financial crisis. We strongly support the Commission’s recommendation that decisions be taken quickly and clearly, while taking into account the progress of reforms already underway. We recognise, however, that the report does represent considerable internal change for the affected banks, with significant cost implications. Implementation will take considerable time, but banks and their customers will start to adjust behaviour much more quickly. We think that the Commission has done a good job in its recommendations for how a ring fence between retail and wholesale banking should be positioned and function, given that UK resolution proposals for distressed banks already require separability - distinct from separation - into different businesses. The ACT is pleased to see the Commission recommends that large corporate loans and deposits are permitted on both sides of the ring fence. It is also encouraging to see that ‘one-stop’ relationships for customers who want both retail and investment banking services would be possible, as would expertise, information and sharing of operational infrastructure across subsidiaries. These were some of the ACT’s key concerns when it engaged with the Commission at the consultation stage and they play an important part in the efficient day-to-day functioning of businesses large and small. With regard to competition in wholesale banking, we note that the Commission does not dwell on this. We continue to share the concerns the Commission set out in the Interim Report about this and note that the subject remains for later enquiry. We have some remaining concerns on the likely detailed provisions and look forward to the relevant consultations and discussions with relevant bodies on those.
1. The Independent Commission on Banking’s Final Report is available at http://bankingcommission.independent.gov.uk/ ----- ends -----
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