WEEKLY COMMENT 7-02-2013
By Barry Edwards
The Chancellor’s speech about the legislation parliament is preparing to improve the regulations to control banks, which is due to be finalised in 2015, was centred around the intention to enforce the ‘ringfencing’ plan put forward by John Vickers in his report.
Many people and politicians feel that the banks must be made to separate their investment banking from the personal and smaller business activities to prevent another financial crisis occurring again. Creating two distinct businesses within the same bank is the proposal agreed upon by government and a reluctant banking industry which is referred to as ‘ringfencing’. This should make sure the investment banking side does not utilise funding from the retail business to carry out its ‘casino’ style functions, as it has become known.