bank reform

£2bn, €1bn… and $19bn. Proposed bank levies so far from the UK, France and US. The tide of ever smaller bank levies appears to be turning.

American banks with assets exceeding $50bn and hedge funds with assets over $10bn would be liable to pay the costs associated with financial reform. This from a proposal by Barney Frank late last night during discussions to finalise Wall Street reform. More on ft.com.

Chris Giles

Sir John Vickers has just been confirmed as head of the Independent Banking Commission

Sir John Vickers is warden of All Souls College, Oxford University, but has long been a core member of the British economic establishment. Until recently he was president of the of the Royal Economics Society and rare among economists in having held jobs in supervising both overall economic policy, as chief economist of the Bank of England, and detailed regulation and promotion of competition in individual industries, as chairman of the Office of Fair Trading.

His initial reputation was made in his analysis of privatisation in the 1980s, in which he argued that competition and effective regulation was generally more important than ownership in seeking to improve the efficiency of companies. Read more

By James Lamont

India has kept its hand well hidden at the table of the G20’s deliberations over how to prevent another global financial crisis. So the acknowledgement by Pranab Mukherjee, the country’s finance minister, that a bank tax is no alternative to better regulation is illuminating.

Senior Indian policymakers have been non-committal about International Monetary Fund-backed proposals for a global banking tax. They were similarly muted when Gordon Brown, the former UK prime minister, claimed to have gained wide support among the G20 countries for a global banking tax to fund future bail outs. The UK Treasury was seeking out India as a key ally.

Part of the reason for India’s reticence is that it experienced the financial crisis very differently from the west, and even some of its Asian peers. India’s banks suffered no threat of collapse, nor earned a reputation for excessive risk or returns. Policymakers are confident of India’s own prudent regulation. They are less sure of regulation elsewhere. Read more

The Central Bank Governors and Heads of Supervision yesterday welcomed progress made by the Basel Committee on Banking supervision, suggesting five areas of particular focus for the banking standards expected by the end of this year.

The Group of Central Bank Governors and Heads of Supervision (“the Group”) is the oversight body of the Basel Committee on Banking Supervision and comprises the same member jurisdictions. Read more

Chris Giles

Alistair Darling seems not to think much of Mervyn King’s call to split banks into their utility functions and speculative bits, writes Chris Giles of the Financial Times Read more