That was easy. Only a few months after Sir John Vickers released his final recommendations for reforming the banking sector — and after much less intra-coalition
struggle than we might have expected — the government is set to announce that it will adopt them ‘in full’. Vince Cable revealed yesterday that he and George Osborne have reached common
agreement on the matter. And, for his part, Osborne will appear before MPs today with further details.
As Robert Peston has already explained, ‘in full’, in this case, doesn’t quite mean 100 per cent — but it’s close. The main proposal to ringfence retail banking off from riskier investment banking will be fully implemented. So too mechanisms to ensure that unsecured lenders are more liable than savers in the event of a bank collapsing. But the banks have secured a concession, it seems, on a recommendation that they should have a ‘primary loss-absorbing capacity of at least 17-20 per cent.’
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