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Banks urged to prepare for reforms

Business Secretary Vince Cable has warned banks they must ready themselves for sweeping reforms which will prevent them from using "the deposits of British savers to play the banking equivalent of the roulette wheel".

Writing in The Mail on Sunday ahead of the release of the Independent Commission on Banking's (ICB) final report, the minister repeated his attack on institutions who continue to award their top staff with "lavish remuneration packages".

Mr Cable also made it clear that he felt banks themselves should foot the bill for the recommended changes rather than their customers.

The ICB, chaired by Sir John Vickers, was set up by the Government last year to find ways to stop a repeat of the banking crisis and taxpayer bailout.

Its final report is due to be published tomorrow and expected to suggest that the retail activities of banks are separated from their investment arms through ring-fencing.

Mr Cable said it was down to the government to act on the recommendations made.

"How we respond will help define the way British banking functions for the next generation," he said.

Describing how an overhaul of the banking system was needed, the minister said: "Three years on from the massive financial heart attack which did enormous damage to the world's economy, we have been reminded that although a complete collapse was averted by the surgeons in central banks and finance ministers, the patient is still far from well.

"The carnage (of the crisis) would have been worse has the Government - the taxpayer - not stepped in to offer guarantees and emergency lending for all banks that were short of liquidity.

"Yet top bankers, whose institutions remain dependent on taxpayer guarantees, continue to award themselves huge salaries and bonuses."


From Belfast Telegraph