Bank reform proposals are not a pick ’n’ mix package

A FAR-REACHING package of reforms for the banking sector should be implemented on an “all or nothing” basis, according to the commission that came up with the recommendations.

Sam Woods, secretary of the Independent Commission on Banking (ICB), said its findings, which are set to cost the industry up to £7 billion a year, were not a “pick ’n’ mix package”.

Woods appeared before members of Holyrood’s economy, energy and tourism committee yesterday to answer questions on the proposals, which were published earlier this month.

The shake-up of the sector includes ring-fencing banks’ high street divisions to protect them from riskier investment arms and setting aside more cash to cushion the blow of potential losses or future financial crises.

Woods told MSPs: “Top line is all or nothing. It is not a pick ’n’ mix package. We have constructed it deliberately so the component parts work together.

“The commission’s view would certainly be that cherry-picking would be a mistake.”

Chancellor George Osborne, who has the power to act on or ignore the recommendations, has pledged to pass the legislation required to implement the reforms before the 2015 general election, with the commission suggesting full implementation by 2019.

Woods admitted the reforms would not necessarily solve the problem of the high concentration of the market in Scotland, where small business banking is dominated by Lloyds Banking Group and Royal Bank of Scotland. He added: “I don’t think it would be fair for people to read our report and think it’s all sorted.”