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CBI RESPONDS TO INDEPENDENT COMMISSION ON BANKING REPORT

The CBI yesterday responded to the Independent Commission on Banking (ICB) report.

The Independent Commission on Banking has set out a substantial package of banking reforms that go beyond the international consensus.

Dr Neil Bentley, CBI Deputy Director-General, said:

“The UK is going it alone on ring-fencing, so the Government must rigorously examine how and when to implement these proposals, otherwise it risks damaging businesses and threatening growth.

“The Commission is right to recommend a flexible approach to ring-fencing and suggest a reasonable time frame for implementation. However some of the services that might be prohibited within the ring-fence, such as exchange rate hedging and other risk management products, could increase costs for firms to access critically important financial services.

“The proposals on capital requirements are out of step with internationally agreed measures underway so will increase the cost of lending for UK businesses, putting them at a disadvantage to their overseas competitors.

“Companies want greater competition in banking so it’s positive that the Commission has set out measures on making switching much easier and improving price transparency.

“The UK needs a stable and resilient banking system, but it is critical that the Government implements these reforms in a way that supports lending to businesses and helps growth.”

Notes to Editors:

The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi the CBI communicates the British business voice around the world.

Media Contact: CBI Press Office on 020 7395 8239 or out of hours pager on 07623 977 854.

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