CBI against breaking up big banks

| October 11, 2010 | 0 Comments
’CBI

Employers’ group, the Confederation of British Industry (CBI) has today said it is against existing banking giants being broken up.

The comments from the CBI come just a few weeks after Britain’s Independent Commission on Banking (ICB) said it was looking at ways to increase competition and choice among high street banks.

One option could see existing banking giants broken up and new names enter the industry, said the ICB.

The ICB, which is headed by Sir John Vickers, was established in June to look at competition and financial stability.

However, the CBI’s director general Richard Lambert believes this is not the way forward and splitting them up is not such a good idea.

Mr Lambert, who is a former editor of the Financial Times editor, and once a member of the Bank of England’s Monetary Policy Committee, was giving a speech on the future of banking.

His comments echo those of Lord Adair Turner, chairman of the Financial Services Authority (FSA), who has previously said that splitting up the retail and investment banking arms of the country’s could increase risks in the financial system.

The ICB will publish its final recommendations next autumn but many believe that it is unlikely that British banks will be forced to break up.

Banking industry experts have argued that splitting up banks could damage the UK’s reputation as a global financial centre.

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