UK Banks Might Face Restructuring Soon

The chairman of the United Kingdom’s Independent Commission on Banking, Sir John Vickers, shared his opinions last Saturday at a luncheon in London Business School on how and why the structure of Britain’s banks should be changed and altered altogether to make them much more protected as a whole country.

He has outlined the many reasons how shields should be put up as well as other relevant activities that big banks should do to be able to safeguard the British economy as well as the taxpayers of the country.  All measures must be done to avoid any failure in the part of the banks.

A few of the biggest banks in the United Kingdom such as HSBC, Barclays, Bank of Scotland, and Standard Chartered were all anxious in Sir Vickers’ comments and opinions on the matter as it may spark a radical change that will be mandated by the government.

The Independent Commission on Banking was formed in summer 2010 to analyze and observe the structural stability and competitiveness of the banks in the country as well as the market as a whole.

Sir John Vickers further reiterated his concerns and his proposed solution on the present structure of the UK banks, “One response to this concern could be somehow to ring-fence the retail banking activities of systemically-important institutions and require them to be capitalized on a standalone basis.”

Along with Sir Vickers’ suggestion, the Basel Committee on Banking Supervision has increased the requirements for capital for all banks across the region.