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11 April 2011

AFME comment on the interim report from the ICB


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AFME welcomed the ICB's recognition that the universal banking model brings benefits that would be lost through a splitting of retail and investment banking into separate entities. Clearly, the “ring fencing” proposal will have cost implications for the affected banks.


Commenting on today’s interim report from the Independent Commission on Banking (ICB), Simon Lewis, chief executive of the Association for Financial Markets in Europe (AFME), said:

“The ICB’s interim report is a thoughtful contribution to the wider debate on securing financial stability.

“Our members fully support reforms that would remove the risk that taxpayers are ever asked again to support failing banks. We will continue to work with regulators on developing mechanisms that would enable failing firms to be recapitalised or wound-down with investors and creditors bearing the cost, through contingent capital or “bail-in”, and are encouraged by the ICB’s comments on the potential for this to form part of its stability proposals.

“We believe this would be most effective if agreed and implemented on a global basis. We therefore support the work that is currently being undertaken by the European Commission in this area as a starting point for international agreement, which we hope the ICB will take into account in its final proposals.
 



© AFME


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