UK banks will not be broken up as part of reform, Lloyds chairman claims

29 September 2010

Financial institutions will not be split as part of new reforms to the sector, the chairman of Lloyds Banking Group has claimed.

Sir Win Bischoff made the comments as part of a speech to a conference in London.

The banking executive, who was quoted by Reuters, said: “Here in the UK, the chancellor of the exchequer has set up the Independent Commission on Banking (ICB) to look at the possibility of splitting up the banks, something which the Americans have not done, which the French and Germans are very strongly opposed to, and which privately I do not believe will ultimately happen.”

His comments follow speculation that new regulations will see banks forced to split up their retail and investment banking divisions in order to ease the chances of unexpected turbulence within the sector.

The ICB recently said it would examine whether breaking up those banks deemed ‘too-big-to-fail’ would aid both competition and increase stability.

Vince Cable, business secretary, recently called for the break-up of the larger financial institutions and described the more reckless City bankers as “spivs and gamblers”.

Meanwhile, the Federal Deposit Insurance Corporation has delayed a vote on whether to allow it powers to dismantle a failing bank in order to avoid adversely impacting markets and the taxpayer.

By Jim Ottewill

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