- A comparison of the Interim and Final Report suggests that initially the ICB had wanted to restrict potential offi cial support to the UK alone, but then found such an approach inconsistent with wider European regulations. Indeed the UK national focus of the Report puts it in some danger of becoming subject to, and potentially overturned by, future European-wide directives aimed at harmonising and/or centralising fi nancial regulation throughout the EU. The present European crisis is leading to calls for more centralised supervision, regulation and resolution for all European-wide SIFIs, amongst which the big fi ve British retail banks are surely included. How far the ICB got a green light to proceed from Commissioner Barnier and his Directorate is not entirely clear, to me at least, but a Commissioner cannot bind, or commit, his successor.
- M Schularick and AM Taylor, “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870– 2008“, NBER Working Paper 15512 (2009), National Bureau of Economic Research, November. See Table 1.
- A Turner, “Credit Creation and Social Optimality”, speech given at Southampton University (2011).
- I doubt if the ICB would agree. They may think that there is enough fl exibility in their design (see their Figure 3.6) and suffi cient extra outside sources of such credit, that funding for household and SME credit will not be much impaired. We shall see.
- If spreads should widen a lot, it would attract branches of foreign banks into the UK retail banking market. Again I am indebted to Iain MacNeil for this point.
- Though there is a private banking exception, eg in para 3.17.
- Non-UK banks can still do retail banking here via branches, but such branches would have to be strictly separate from any investment banking business done in the UK via subsidiaries. Again, perhaps a few foreign banks, which are currently doing both some retail and some investment banking business in the UK within a single subsidiary, may become inclined to withdraw from any UK retail business.
Law and Financial Markets Review
Volume 6, 2012 - Issue 1