Clegg: Banking reform could happen before 2019

City A.M. Reporter
Wide-ranging banking reforms could be in place well before the 2019 deadline proposed earlier this month by a government-backed commission, Deputy Prime Minister Nick Clegg said on Tuesday.

John Vickers, head of the Independent Banking Commission, the body set up by the government to come up with ideas for reform, recommended that the changes should be in place by 2019 at the latest.

"I am pretty confident that that basically is a backstop date," Clegg told BBC radio. "As long as we legislate during this parliament, I suspect that actually the changes will be implemented well before 2019."

The commission put forward proposals for some of the world's toughest banking regulation in an attempt to avoid a repeat of the financial crisis.

With credit squeezed, the government had to inject huge amounts of cash into the system to bail out two of Britain's biggest lenders, Lloyds and Royal Bank of Scotland.

Chancellor George Osborne has faced calls to bring forward the reform deadline. However, he argues that the changes are complicated and should not be rushed. The 2019 deadline is also close to the timetable for the implementation of the Basel III capital rules.

The government plans to pass the laws to allow the banking reform during this parliament, which runs until May 2015 at the latest.