Vickers Report: Difference between revisions
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The report of the UK's Independent Commission on Banking, named after the Commission's chairman Sir John Vickers. | The 2011 report of the UK's Independent Commission on Banking, named after the Commission's chairman Sir John Vickers. | ||
( | The UK Government accepted the Commission's main proposals. Many of the recommendations of Vickers and of the independent Parliamentary Commission on Banking standards were given effect by the Financial Services (Banking Reform) Act 2013. | ||
The Vickers Report's main recommendations included the identification - and partial separation - of: | |||
(i) Retail banking (including retail deposit taking and small business lending); and <br> | |||
(ii) Riskier trading activities in the capital markets (sometimes also known as investment banking). | (ii) Riskier trading activities in the capital markets (sometimes also known as investment banking). | ||
The partial separation proposed in the report would be implemented by a "ringfencing" structure within the large banks currently undertaking both types of activity. | The partial separation proposed in the report would be implemented by a "ringfencing" structure within the large banks currently undertaking both types of activity. | ||
Under the ringfencing proposals the capital and the stability of the retail banks would be protected from the claims of creditors of the banks' riskier trading activities. The intention of the proposals | Under the ringfencing proposals the capital and the stability of the retail banks would be protected from the claims of creditors of the banks' riskier trading activities. The intention of the proposals was that the retail banks should not require public (taxpayer) rescue again, following any future failures of banks' riskier trading activities. | ||
In simple terms the proposals | In simple terms the proposals were designed to prevent banks from speculating with retail deposits (and from jeopardising their future ability to make small and medium-sized business loans). | ||
The proposals of the Vickers Report | The proposals of the Vickers Report were more moderate than a full separation of ownership (as required - for example - under the former US Glass-Steagall Act). | ||
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* [[Glass-Steagall Act]] | * [[Glass-Steagall Act]] | ||
* [[Independent Commission on Banking]] | * [[Independent Commission on Banking]] | ||
* [[Liikanen rule]] | |||
* [[Ring fence]] | * [[Ring fence]] | ||
* [[Volcker Rule]] | * [[Volcker Rule]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:The_business_context]] | [[Category:The_business_context]] | ||
Latest revision as of 19:54, 18 August 2022
The 2011 report of the UK's Independent Commission on Banking, named after the Commission's chairman Sir John Vickers.
The UK Government accepted the Commission's main proposals. Many of the recommendations of Vickers and of the independent Parliamentary Commission on Banking standards were given effect by the Financial Services (Banking Reform) Act 2013.
The Vickers Report's main recommendations included the identification - and partial separation - of:
(i) Retail banking (including retail deposit taking and small business lending); and
(ii) Riskier trading activities in the capital markets (sometimes also known as investment banking).
The partial separation proposed in the report would be implemented by a "ringfencing" structure within the large banks currently undertaking both types of activity.
Under the ringfencing proposals the capital and the stability of the retail banks would be protected from the claims of creditors of the banks' riskier trading activities. The intention of the proposals was that the retail banks should not require public (taxpayer) rescue again, following any future failures of banks' riskier trading activities.
In simple terms the proposals were designed to prevent banks from speculating with retail deposits (and from jeopardising their future ability to make small and medium-sized business loans).
The proposals of the Vickers Report were more moderate than a full separation of ownership (as required - for example - under the former US Glass-Steagall Act).
