Thinktank rubbishes claims bank reform will hit economy

clock

The Independent Commission on Banking (ICB)'s plans to ring-fence will have a very limited impact on the UK's economic output, according to Ernst & Young.

A report from the Item Club suggested proposals to force banks to ring-fence their retail deposit and lending arms could knock 0.3% off GDP following a 1.5% percentage point rise in costs for the nation's biggest borrowers, the FT reports. The banks have complained the proposals will drive up the cost of borrowing and limit lending, prompting the government to consider halting the new rules until 2015. However, the Item Club report casts doubt on the banks' position, according to the FT. Lloyd Barton, economist at Ernst & Young, said even if banks do have to pay more for wholesale ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

'Discussion-worthy stuff': Chinese assets under pressure

'Discussion-worthy stuff': Chinese assets under pressure

China has an 18% share of global GDP and only a 3% MSCI ACWI weighting

Chris Justham
clock 02 April 2024 • 2 min read
Why investors 'can't outrun' slow-moving demographics

Why investors 'can't outrun' slow-moving demographics

'Demographic change is a key megatrend'

Darius McDermott
clock 07 March 2024 • 5 min read
Spring Budget 24: Ten key takeaways from Jeremy Hunt's speech

Spring Budget 24: Ten key takeaways from Jeremy Hunt's speech

British ISA, Office for Budget Responsibility, tax cuts

Valeria Martinez
clock 07 March 2024 • 4 min read