Thinktank rubbishes claims bank reform will hit economy

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 ...