The Queen's Speech: George Osborne to set out banking reforms
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Plans for a radical reform of the banking sector will be spelled out by Chancellor George Osborne ahead of his Mansion House speech next month.
The Government will press ahead with the controversial measures drawn up by the Independent Commission on Banking (ICB) to help prevent further bank bailouts, the Queen's Speech confirmed today.
The next step along the road to reform is expected to be a white paper published on June 14 to coincide with the Chancellor's speech to the City, which will form the basis of a Banking Reform Bill.
One of the main reforms will be to force banks to ring-fence their retail arms from riskier investment banking divisions.
A new rule, known as the depositor preference, will ensure ordinary savings and deposit accounts are repaid first when a bank goes under.
Other proposals include making it easier for customers to switch their account from one bank to another by September 2013 and requiring banks to increase capital reserves to make them more resilient to financial crises.
Mr Osborne has described the changes as "the most far-reaching reforms of British banking in our modern history".
They will cost the industry £3.5 billion to £8 billion a year and potentially reduce GDP by between £800 million and £1.8 billion. But he believes the costs will be far outweighed by the benefit of avoiding future financial crises, which he said would reach £9.5 billion a year on "modest" assumptions.
The ICB, chaired by Sir John Vickers, delivered its report in September and the Government has been consulting on the plans since December when it accepted the findings.
The Queen's Speech comes days after Bank of England governor Sir Mervyn King said it was vital that the Government pressed ahead with the reforms sooner rather than later.
Given the complexity of the plans it is understood that the legislation may not hit the statute books until 2014 and the laws will not be fully implemented until 2019.
PA
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments