UK Chancellor George Osborne is going to make his announcement to the Members of the Parliament regarding his plans to put into law the separation of retail banking from the other financial investment activities.
This action is under the recommendation by Sir John Vickers based on his banking report that was released following the economic crisis.
According to Vince Cable who is the Business Secretary, the government will acknowledge the report “in full”.
According to Robert Peston who is the editor of the business section in BBC, the banking report of Sir Vickers may not be 100 percent as originally billed. One of the things that may be revised in the proposal is that the largest UK banks should have enough capital plus loans that may be exchanged into cash in order to manage any possible financial damages equivalent to 20 percent of the total balance sheet.
Mr. Peston has pointed out HSBC’s argument on this regard. Doing so would mean a higher expense for the bank, especially in their case wherein they are bigger outside the UK compared to how they operate within the country.
However, it is seen that Sir Vickers and the rest of his team have been quite triumphant in accomplishing their goals and milestones. Eventually, the financial system in the country will be altered.
“Our banks will in the coming five years be forced to undergo significant financial, cultural and managerial reconstruction,” said Sir Vickers, the proponent of the banking reform.
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