Earlier this week the Independent Commission on Banking Reform released its final report. In it are reforms that the bankers are claiming would cost the industry over £7billion a year.
Interestingly, most of the recommendations wouldn’t be implemented until 2019. Why so long is beyond baffling considering the sector is an octopus and continues to have the potential to bring the economy to its knees.
Delaying the reform is also particularly worrying when you consider that they are unable to put in place policies and procedures to stop reckless activity. Case in point, we hear today of another rouge trader: Kweku Adobol who stands accused of £1.3 billion in fraud at Swiss banking giant UBS.
And so I suppose who really needs reform when moral hazard is in force at the banks. Basically, because they know that they are near 100% protected by the lender of last resort (i.e. government/taxpayers), they continue to take riskier investments than they would in the absence of this protection.