Vickers splits the difference between risk and City interests
What was the problem the Independent Commission on Banking was trying to solve? Once you had defined the question you had already defined the scope of the anwers. So here's the key paragraph of the report, in full Orwellian glory:
"[The proposed measures] should therefore reduce the probability and/or impact on the UK (including on the fiscal position) of financial crises in the future. At the same time they appear likely to maintain the efficient flow of credit to the economy, protect basic banking services and support the ongoing competitiveness of the UK economy including the City."
For those mystified about the multiclausal nature of this self-defined success criteria, and their highly "maybe" nature - read my last blog. With a few hours to go before Vickers' remit was set, the banks insisted that any proposals must meet these last criteria: ensure the banks keep lending and not harm the competitiveness of the City.
They could have done more, this passage implies, but it risked harming the competitiveness of the City.
Let's be frank about where these proposals sit on a scale of 1-to-10 from no change to radical: they score about 3 structural issues.
Britain's banking system did not collapse and its deficit did not soar to near unsustainable levels because there were not anough different coloured ATMs on the high street. On the core issue of too-big-to-fail nobody is pretending they offer a solution.
I will give you my detailed view when I have read the detail.