Any other business | 17 September 2011

Safer banking will mean the same rotten service at a higher price

Cross-party support made the release of the Vickers report on banking reform less of an event than it might otherwise have been. Vince Cable looked almost benign on the Commons bench beside George Osborne. Ed Balls had nothing new to say. After all their lobbying beforehand, bankers got no sympathy for the £7 billion that Vickers says ring-fencing and re­capitalising their retail operations will cost, and barely bothered to protest. Ring-fencing, as I have repeatedly argued, is far from a complete defence against the full range of banking follies. But nor need it be a disaster for banks’ profitability, given the eight-year implementation timetable within which they will be able to squeeze costs to fit. What I do wonder is whether — in a regime with higher barriers to entry and in which existing banks will clearly seek to pass more costs to personal and business customers — Vickers has killed any possibility of a significant wave of user-friendly new entrants into the high-street market.