Commenting on the release of the Vickers Report, Director General of the Institute of Economic Affairs, Mark Littlewood said:
“Banks – like any other business – should be allowed to fail in a way which does not bring the whole economy crashing down. Vickers’ proposals entirely miss the point. They do not safeguard banks but neither do they ensure orderly failure of banks is possible. The government should reject the ICB’s recommendations and implement changes to ensure banks can fail properly.
“The taxpayer should not be liable for any future banking collapse. Today’s proposals bring us no nearer to that goal.
“The idea that bank ring-fencing will safeguard banks from failure is a fiction. Lehman Brothers was an investment bank without a retail arm, Northern Rock was a retail bank without an investment arm; ring-fencing would have had no effect on either.”
Prof. Philip Booth, Editorial Director of the Institute of Economic Affairs, said:
“The ICB report smacks of an elegantly worked-out solution to problems that other bodies are addressing much more effectively.
“The ICB is right to seek ways to ensure that taxpayers do not bear the cost of b