Sir John Vickers, speaking at the London Business School, conceded that the credit crunch had 'exposed a damagingly rickety structure' in the financial system and stated that ensuring the sustainability of the banking system would require 'measures to curb excessive risk-taking incentives.' Following calls for a separation of conventional retail and 'casino' investment banking, he outlined his view that a 'credible resolution would seem to require at least some form of separability'. For the BBC's Joe Lynam, this may fall short of full separation, but could yet result in an approach known as 'subsidiarisation,' an effective ring-fencing of banking activities whereby investment and retail banking parts are financially, but not legally, separated.
In addition, Vickers signalled at an end to the 'Too Big to Fail' structure of the banking sector that sees the top six British banks control 90% of all deposits, compared to 35% for America's top eight. Echoing a recent speech by FT columnist and ICB member Martin Wolf condemning such 'lethal moral hazard' and proposing a higher baseline for capital requirements, Vickers concluded that 'it cannot be disputed that banks of systemic importance need much more loss-absorbing capacity' and described implicit state guarantees of survival a 'distortion' that should be 'neutralised or contained'. In response to the speech, British Banking Association chief executive Angela Knight said Vickers' proposals marked the beginnings of a more sustainable banking settlement, where 'a bank can be allowed to fail without having an impact on the economy.' In April the ICB will publish an interim report prior to their final recommendations due in September.
You can read the full speech here
Former CSM Chair sets up 'The Methodist Tax Justice Network
New tax justice network (Author: Sam Buck)
What Money Can't Buy - the moral limit of markets
Event at St Paul's Cathedral exploring issues in the latest book by Michael Sandel (Author: Sam Buck)
Christian investors question executive pay
A Church Times piece on Church investors and bankers bonuses. (Author: Sam Buck)
Christian financial advisors call for debt forgiveness in Eurozone
The Association of Christian Financial Advisers is calling for debt forgiveness as a way to ease the Eurozone debt crisis and prevent a possible collapse of the banking system.
(Author: Sam Buck)
Christian Socialism at Davos
Guardian piece on Christian Socialism and its relevence for today (Author: Sam Buck)
Ethical capitalism?
Report from a debate on the future of capitalism (Author: Sam Buck)
ECCR Publishes Report on The Banks And Society
Read the ECCR's latest report on the impact of the banking sector on the lives of customers, employees and communities... (Author: CSM)
THE ECONOMY
Economy home page (Author: )
Labour Responds to the Emergency Budget
Thoughts and reactions from Labour HQ on the Emergency Budget and an invitation to respond. Read on or visit www.labour.org.uk (Author: Andy Freeman)
Labour's first election film – The Road Ahead
Labour's first broadcast of the 2010 election describes the choice facing Britain on May 6: whether to stay on the road to recovery or risk a change of direction.
(Author: CSM)
Theology and executive pay
The Church Investors Group have published a key paper outlining moral questions around Executive pay and have brought a theological basis to this ongoing debate. (Author: Andy Freeman)
Obama agrees with CSM Call for Separation of Banks
CSM is pleased to see agreement with our campaign to separate the banks, and continue to lobby for UK banks to be split ina similar way (Author: CSM)
Separate as well as regulate
Why we must seize the day and reform the banking system (Author: Stephen Beer and John Mitchell)
Separating the banks: looking at the arguments in more detail
We look at the case for separating banks and respond to some arguments against. (Author: CSM)
EDM Calling for Separation of the Banks
The Early Day Motion written by Alan Michael MP calling for the government to separate the banks (Author: Alun Michael MP)
Obama agrees with CSM Call for Separation of Banks
CSM is pleased to see agreement with our campaign to separate the banks, and continue to lobby for UK banks to be split ina similar way. (Author: Esther Barlow)
ING bank separates banking operations
ING is moving towards complete separation of their banking and insurance operations. (Author: Josmar Hart)
Bank of England Governor repeats call to reform banks
He reveals we bailed out banks with a previously unrevealed extra £61.6bn last year and calls for structural reform. (Author: CSM)
Gordon Brown says stronger bank regulation not enough
PM proposes new measures to renew the economic and social contract between banks and society. One more measure is needed, says CSM. (Author: CSM)
Archbishop - Economics is 'housekeeping' for humanity
The Archbishop of Canterbury, Dr Rowan Williams, has urged us to keep economics in perspective, as it is only one aspect of human existence... (Author: CSM)
Bank of England Governor says separate the banks
Mervyn Kings comments effectively support CSM's campaign. (Author: Stephen Beer)
MPs urge government to separate casino banking from retail banking
CSM Chair tables Early Day Motion, backed by Treasury Committee chair (Author: Stephen Beer)
Markets and morals at Labour conference
The values that should underpin our economy were debated by CSM at Labour Conference. (Author: CSM)
Government minister calls for banks to reform morals to earn forgiveness
A change of behaviour is required, argues Paul Myners (Author: Stephen Beer)
Introducing 'Simplify'
Introducing the Evangelical Alliance's 'Simplify' project. Simplify asks us to look at our lifestyle, our purchases and possessions during this time of recession. (Author: Danny Webster)
EU Predicts Economic Gloom
As the European Commission forecasts a year of decline and unemployment, we focus on the Church's role in providing a spark for the economy and on our 2009 Tawney Dialogue. (Author: Andy Freeman)