Everything you needed to know about the long-awaited report of the U.K.’s Independent Commission on Banking was summed up in a few share prices yesterday.
Barclays Plc (BARC) and Royal Bank of Scotland Group Plc (RBS) surged after details on overhauling the finance industry were released.
Split up the banks? Shut them down? Make them move elsewhere? No. The commission came up with some irrelevant, complex and hard-to-enforce rules aimed at raising capital ratios and separating their retail from investment arms.
In effect, the banks got off scot-free. The British economy and the nation’s taxpayers will be the big losers.
John Vickers, the former Bank of England chief economist who was chairman of the commission, has failed to live up to the scale of the task he was assigned. Like the Dodd-Frank Act in the U.S., there will be lots of new rules and regulations, but the basic structure of the industry will remain the same — and so very little will really change.
More here: Bankers Get Off Scot-Free in Industry Overhaul: Matthew Lynn – Bloomberg.
