Any other business | 16 April 2011

Vickers’s half-time score: not half as badas bankers feared or bashers hoped

‘Not half as bad as it might have been,’ was the reaction of the first banker I spoke to on Monday about the interim report of Sir John Vickers’s Independent Commission on Banking. ‘And forcing Lloyds to sell off a few more branches won’t do a damned thing to promote competition.’ ‘Not half as bad’ for bankers seems to imply not half as good as it might have been for customers. The increased and ring-fenced capital requirements for retail banking mean borrowers could be charged more for loans, and are unlikely to be offered greater choice. On the other hand, a less crisis-prone banking sector should be capable of sustaining more stable relationships, so that small businesses do not find bank managers urging them to borrow more than they can afford in boom times, then cancelling their limits and refusing to take their calls as soon as head office says the boom is over.