Ahead of Monday’s final report from the Independent Commission on Banking (ICB), Giles Williams, Head of KPMG’s Regulatory Centre of Excellence in Europe, commented: “The long awaited ICB report will not bring an end to the uncertainty overhanging UK banks with the decision making process, particularly over ringfencing, only just beginning."
“It is imperative that any ICB recommendations are considered in line with other regulatory initiatives. The ICB is only one piece of the global regulatory jigsaw facing banks and it is crucial all these pieces fit together. Equally the government must decide whether they’re prepared to press on with these reforms alone and allow other countries to follow or not."
“Implementation of the proposed recommendations will inevitably come at a cost and the government must strike the right balance between financial stability and economic growth. The future profitability of banks will come under pressure as business models need to be restructured. If financial stability means a reduced risk profile for banks, it is clear that customer borrowing costs will go up and the flow of credit to the economy will be reduced.”
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Notes to editor
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.