Treasury backs Bank Commission

Steve Dinneen
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THE Treasury yesterday gave its backing to the Independent Commission on Banking, saying chancellor George Osborne has confidence in its report into the financial industry.

The Commission is tasked with giving recommendations to the government on whether UK banks should be forced into a radical restructuring, with splitting investment and retail banks into separate entities one option being considered.

Fears over the possible conclusions of the Commission’s report is understood to be one reason HSBC is seriously considering its UK domicile.

The Treasury’s backing comes after suggestions that at least one Commission member believes there has been too much Treasury meddling in the process.

There is also doubt amongst senior City figures that the government will follow the main recommendations of the Commission after successfully negotiating the Merlin accord with the main UK banks to increase bank lending. However, the Treasury distanced itself from this, telling City A.M. it “looks forward” to the recommendations made in the report.