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Strategies & Market Trends : The coming US dollar crisis
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From: axial9/14/2011 7:14:39 AM
   of 71456
 
[Looks a lot like Glass-Steagall ... too late]

Acclaim for banking shake-up plan

There has been widespread support for a government-backed commission that has recommended UK banks ring-fence retail from investment banking.

Separate entities

The report recommends that ring-fenced banks should be the only operations granted permission by the UK regulator to provide "mandated services", which include taking deposits from and making loans to individuals and small businesses.

It says that the different arms of banks should be separate legal entities with independent boards.

Another of the ICB's recommendations is that banks must have a buffer to absorb the impact of potential losses or future financial crises - of at least 10% of domestic retail assets in top-quality form, such as shares or retained earnings.

That is a stiffer target than the 7% recommended by the international Basel Committee on Banking Supervision.

It also says the biggest banks should go further than this and have a safety cushion of between 17% and 20% of assets, made up of highest-quality assets topped up with bonds that can be easily converted to equity.
  • Ring fence retail from investment banking
  • Keep 17-20% of certain assets as "loss-absorbers"
  • Lloyds branch sale to be opportunity to bring in competitor
  • New system to help customers switch current account
  • Reforms to be implemented by 2019 at the latest
  • Cost to banks of between £4bn-7bn
bbc.co.uk

Jim
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