Banks: MPs want stronger ring-fence
The Bank of England must be given power to break up banks which misbehave
THE Bank of England must be given the power to break up banks which misbehave, the Parliamentary Commission into Banking Standards will today tell Chancellor George Osborne.
In a 140-page report, coming just two days after UBS was fined more than £900m for attempting to fix Libor interest rates, the Commission said existing plans to reform banking and impose a ring-fence to protect retail depositors fell ³well short of what is required².
As The Independent reports, Commission chairman Andrew Tyrie says the Bank of England needs to "electrify" the ring-fence" between the deposits of ordinary savers and the 'casino' trading arms of banks.
The Commission's suggestions will spark fierce opposition from banks which are already warning that extra regulation and red tape will raise the cost of borrowing and hold back the recovery of the economy.
But the high standing of the Commission's members, and the fact that the report secured their unanimous backing, will massively increase the pressure on Osborne to adopt its recommendations in full.
In addition to senior MPs on the Treasury Select Committee, it includes the incoming Archbishop of Canterbury, Justin Welby, the former Chancellor, Lord Lawson, and the former Cabinet Secretary, Lord Turnbull. ·