Bank shake-up set for 2019
The Independent Banking Commission (IBC) has published its final report into UK banking reform, and said the strategy – which includes the ring-fencing of retail banks to protect small businesses and individuals alike - should be in place by 2019.
The report said the move would help insulate “vital banking services” on which small businesses and individuals depend upon. According to the IBC, the report’s recommendations aims to create “a more stable and competitive basis for UK banking in the longer term. That means much more than greater resilience against future financial crises and removing risks from banks to the public finances.
“It also means a banking system that is effective and efficient at providing the basic banking services of safeguarding retail deposits, operating secure payments systems, efficiently channelling savings to productive investments, and managing financial risk.”
The report claimed businesses with a turnover of less than £25m usually do not have an alternative banking provider, and that “Therefore, it is appropriate for only ring-fenced banks to be able to take the deposits of all companies classified as SMEs under the Companies Act”.