Bankers call for a delay on reforms
The British Bankers' Association has called for the Independent Commission on Banking's proposed reforms to be delayed until the economy has recovered and taxpayers have been repaid for bailing out the banks.
Angela Knight, the BBA's chief executive, said markets and economies were now more fragile than when the ICB published its preliminary report in April, and imposing costly reforms on lenders risked denting confidence and cutting the supply of credit to the economy.
Ms Knight said: "We have a high degree of uncertainty, market turbulence and lack of confidence that governments in other countries have got a sufficient grip on their economies. We are in for a very difficult autumn.
"This is therefore the time to concentrate on economic recovery and paying back ... the Government and taxpayers.
"By all means think about new regulation, but now is not the time to add that as an overlay with respect to costs, uncertainty or whether it is going to do anything beneficial anyway," she said.
The BBA's intervention comes two weeks before the ICB publishes final plans for increasing stability and competition in UK banking.
It will then be up to the Chancellor, George Osborne, to decide whether and at what pace to implement any reforms.
The commission's main proposal was to "ring-fence" retail and investment banking operations to separate essential functions from trading. The ICB did not say how it would make the separation and the banks are anxiously awaiting details.