Lords to question Sir John Vickers, HSBC and Lloyds
26 June 2015
The House of Lords Economic Affairs Committee took evidence from Sir John Vickers former Chairman of the Independent Commission on Banking. The Committee followed this session with evidence from Jonathan Symonds, Chairman of HSBC Bank PLC and George Culmer, Executive Director and Chief Financial Officer, Lloyds Banking Group.
Tuesday 30 June, Committee Room 1, Palace of Westminster:
- Sir John Vickers, former Chairman of the Independent Commission on Banking
- Jonathan Symonds, Chairman, HSBC Bank PLC
- George Culmer, Executive Director and Chief Financial Officer, Lloyds Banking Group
The Committee questioned the witnesses on whether the ring-fencing of retail banks, proposed by the Independent Commission on Banking in 2011, is still necessary today. This follows recent criticism of the proposals which has alleged that subsequent reforms to bank regulation, such as more stringent capital and liquidity requirements, has made the ring-fence redundant before it has even been implemented.
Sir John Vickers gave evidence from 3.35pm. Areas the Committee covered included:
- Is ring-fencing still necessary? Given other reforms, will it make banks any safer or merely increase complexity?
- Do you share the optimism of the Governor of the Bank of England that banks in future will be resolved "without recourse to the taxpayer?"
- Given you argued against the full separation of banks, would you be concerned if HSBC decides to spin-off its UK retail bank?
- Will the costs of ring-fencing, which the Treasury estimate to be more than £4 billion a year, end up being borne by customers?
- Is there merit in limiting the size of banks?
This was followed at 4.30pm by evidence from Jonathan Symonds and George Culmer. In this session questions the Committee asked included:
- Are you in favour of the ring-fence?
- How much do you expect the implementation of the ring-fence to cost?
- To what extent will ring-fencing disadvantage you relative to foreign competitors?
- Has subsequent regulatory reform rendered the ring-fence redundant?
- If HSBC decides to spin-off its UK retail bank, is that a sign of the effectiveness of the ring-fence? Do you agree with the Chancellor that a recovery in banks' profitability means they can make a bigger contribution to the repair of the UK's public finances?