“A chorus of concerned bankers and business people is now warning about the consequences to economic growth of further uncosted regulatory change”, the British Bankers’ Association (BBA) warns.
The Association is asking policy makers to be “acutely aware” of the dangers of further increasing the cost of banking at a time when government priorities should be restoring financial stability, securing economic recovery and ensuring regulatory reform is fit for purpose.
BBA chief executive, Angela Knight, comments: “The UK is leading an international regulatory reform programme which has been largely uncosted. Its economic impact has not been assessed.”
According to Ms Knight, few countries intend to implement the programme in full, but will instead select the parts they consider relevant.
The Independent Commission on Banking (ICB), which will publish its final report in September, is expected to recommend that banks ring-fence their retail operations so they are protected from losses from investment banking activities.
However, the proposal has been described as a “leap in the dark” by the Treasury Select Committee, which has asked the ICB to look at improving corporate governance instead.