The Banking Commission has published the responses it received to its Issues Paper. It had over 150 responses. The key themes were:

  • those in favour of splitting retail and investment banks said retail deposits provide a funding subsidy and there should be separation of risk and reward for universal bank employees risking shareholder capital;
  • some respondents said the implicit "too big to fail" guarantee distorts markets;
  • those against a split said a split would have a negative impact on businesses needing access to a range of complex financial products as well as basic services, would have costs implications for the sector, and would have an impact on the UK’s competitiveness as a location for financial services;
  • respondents agreed with "living wills" but opinions differed on what conditions should apply to recovery plans;
  • few respondents supported narrow or limited purpose banks;
  • some respondents addressed bank capital, liquidity and loss absorbency, with most saying Basel III is insufficient. Responses raised concerns about risk-weighted assets measures, liquidity restrictions, repo assets and contingent capital;
  • some respondents thought there should be a ban on proprietary trading by banks. Most thought there should be more transparency;
  • many respondents commented on retail market competition; and
  • most respondents agreed the link between financial stability and competition is uncertain and there is no reason why the two could not coexist, but this relied on the presence of good regulation and transparency.

(Source: Press Release and Website)