More stringent reforms are needed to make sure the British banking sector is resilient to potential future shocks.
That is according to a new report published this morning (11 March) by the Parliamentary Commission on Banking Standards, which has called on the government to go further in its efforts to make the industry more secure and offer taxpayers greater levels of protection.
For instance, the panel believes that regulators should be entrusted with the necessary amount of power to force banks to split their retail and investment divisions, while also being able to decide how far financiers are able to leverage their capital holdings for lending and investment.
The group indicated that the administration should consider reserving the right to ring-fence all lenders' retail and investment operations if just one company abuses the new Financial Services Bill.
"The bill would be strengthened by making specific provision to consider the case for full, industry-wide separation if the ring-fence is judged to be failing," the report noted.
By Gary Cooper