CBI opposed to bank break-up
Employers’ group, the Confederation of British Industry (CBI), has today warned about the implications of breaking up the country’s banks.
Its warning comes as the Independent Commission on Banking (ICB) continues to look into the possibility of splitting up the big banks – a move which could increase competition and choice among high street banks.
It would also make banks safer and less at risk of taxpayer bailouts, according to the ICB.
However, John Cridland of the CBI believes by splitting up the big banks, another banking crisis would not be prevented and this move would be a “mistake”.
ICB chairman Sir John Vickers has previously said splitting off the banks’ investment bank operations is still a possibility, but no final decisions have been made.
However, Mr Cridland, who took over as director general of the CBI last week, believes this move would damage the UK’s reputation as a global financial centre.
Mr Cridland comments: “Breaking up banks would be a mistake; we need a strong banking system to help support the economy and growth.
“Improving credit flows and providing relevant financial products to businesses will be critical to drive growth and recovery,” he added.
The ICB has until September 2011 to make its recommendations to the Government.