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

Bank of England 'presses pause, not stop' as it holds rates at 3.75%

Bank of England 'presses pause, not stop' as it holds rates at 3.75%

Majority of 6-3

Patrick Brusnahan
clock 30 July 2026 • 2 min read
Burnham calls for National Care Service acceleration

Burnham calls for National Care Service acceleration

Social care commitments

Cameron Roberts
clock 29 July 2026 • 4 min read
News editor's view: Burnham's Britain arrives

News editor's view: Burnham's Britain arrives

The news editor's Friday Night Takeaway from 24 July

Isabel Baxter
clock 24 July 2026 • 3 min read