In June 2010 the Chancellor of the Exchequer announced the creation of the Independent Commission on Banking to consider structural and related non-structural reforms to the UK banking sector. The proposals will aim to promote financial stability and competition in the sector. The Commission will issue its report to Government on the 12th of September 2011.
Specific aims of the policy recommendations are:
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Reducing systemic risk in the banking sector, exploring the risk posed by banks of different size, scale and function;
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Mitigating moral hazard in the banking system;
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Reducing both the likelihood and impact of firm failure; and
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Promoting competition in both retail and investment banking with a view to ensuring that the needs of banks’ customers and clients are efficiently served, and in particular considering the extent to which large banks gain competitive advantage from being perceived as too big to fail.
Navigant's Financial Services team has consulted with its clients and constructed detailed models of the proposals published in the interim report. Key concerns from the findings include unexpected consequences that may arise from proposed regulatory and structural change.
To continue the dialogue via Navigant’s LinkedIn Group “Independent Commission on Banking – Discussion Forum” click here.