Quick Search

Banking Reforms - what's new?

The New Banking Reforms

The Chancellor, George Osborne, has given an assurance to voters that the government is committed to transformation of the banking system on the day that the much-vaunted banking reform bill goes to parliament.
Mr Osborne will commit to ensuring that the new ring-fence surrounding any bank's investment and high-risk operations is 'electrified' to ensure that these activities are kept separate from retail banking.
UK's Finance System has Often Been Considered Relatively Backward 
This system acts as the 'plumbing' for the UK's finance system and it has often been criticised for being relatively backward, particularly compared to other countries. The different parts of the payments system, including CHAPs and BACs, have been largely self-regulated as they are owned by the UK's main banks. The Chancellor wants to see this system opened up and many people outside of the industry will support this.
Previously Recommended Banking Revisions Failed to be Implemented
A report published during the Labour government's time in office recommended changes to the system. However, the government failed to implement them. Those who remember history will be keen to learn of the detail behind Osborne's latest proposals and then watch to see whether they are subsequently watered down over time.
Fresh Uncertainty for British Banks

There are two primary schools of thought. The first group thinks that the proposal represents a climb-down for Mr Osborne and that it opens up the topic of optimal structures for UK banking and creates fresh uncertainty for British banks in the process. The second group feel that this change will be largely cosmetic and the strength of feeling in this camp does clearly indicate how little regard the public now has for this beleaguered industry.

Will the Threat of a Break-up be enough of an Incentive for Banks to Reform?

There is a possibility that the distant threat of break-up will focus the minds of each bank and provide a strong incentive to view the ring-fence in a genuine and serious way. However, even this change will mean little to the critics, who believe that both the Independent Banking Commission and the government should have pushed for clear separation from the beginning.

The problem is that if you believe that a ring-fence will be ineffective by nature, or that the government continues to allow the banks far too much leeway in setting their own terms, then you'll probably feel that the concept of 'electrifying' the ring-fence will make very little material difference. After all, let us not forget that even the world's most stringent ring-fence would not have been able to prevent the fall of Northern Rock, which didn't even have a 'risky' investment arm and instead had a basic mortgage and retail operation.


Written by David Archer of Circle Square - Financial Recruitment London

If you're not sure which career move would best suit your skills and experience take a look at our Job Profiles
The profiles provide advice on the qualifications, skills and experience required for each career option. The job profiles also outline salary expectation, job responsibilities and career progression: 
If you are looking for advice we have a dedicated career advice section. Our advice is not just generic recruitment advice we have tailored advice for each of the recruitment divisions we work in including: 
To contact one of our specialist financial recruitment consultants call 0207 492 0700 or email: jobs@circlesquare.co.uk Connect with us on Google+  & Facebook

We use cookies to provide you with the best possible browsing experience on our website. You can find out more below.
Cookies are small text files that can be used by websites to make a user's experience more efficient. The law states that we can store cookies on your device if they are strictly necessary for the operation of this site. For all other types of cookies we need your permission. This site uses different types of cookies. Some cookies are placed by third party services that appear on our pages.
Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.
ResolutionUsed to ensure the correct version of the site is displayed to your device.
SessionUsed to track your user session on our website.
Statistic cookies help website owners to understand how visitors interact with websites by collecting and reporting information anonymously.
Google AnalyticsGoogle Analytics is an analytics tool to measure website, app, digital and offline data to gain user insights.

More Details