LORD Myners blasted the Vickers report into reforming the UK’s banks yesterday, arguing that it missed an opportunity to properly interrogate the sector.
In a House of Lords debate the former City minister said the reforms would neither reduce the risk of banks causing another crisis, nor improve competition. The reforms would also saddle banks with the need to raise about £140bn in extra capital at a time when markets were unlikely to tolerate it, he warned.
“It has failed to really explore the causes of the banking crisis and in particular the failures of management and governance, and instead addressed itself to how we might lessen the damage of a repeat of this crisis rather than reducing the risk of a further crisis,” he told City A.M.
“I think it is rather narrow in the issues it chooses to address and gives no serious consideration to breaking up the banks or establishing a new investment bank.”
Myners said he was concerned that the review “excessively focused on ring-fencing” and did not address the growth in bank assets from about 50 per cent of UK GDP in the 1980s to 600 per cent today. Less than three per cent of the assets of the big four banks is in lending to business, he added.