This week we’ve seen a raft of banking reform as mixed as the contents of the Christmas stocking many of us will be peering into in bemusement, in a few short days. That the government took three months to rubber stamp the somewhat limited recommendations of the Independent Commission on Banking (ICB) is disappointing, but the final report of the Joint Committee on the Draft Financial Services Bill, and a paper from the Bank of England (BoE) on macro prudential policy tools all point towards recognition of a key issue that Intellect has been campaigning on for some time.

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A. Not a lot – a lack of transparency covered both up by which point it was too late to mitigate significant losses.

You can’t help but feel that the Independent Commission on Banking’s final report, published a couple of weeks ago, has somewhat missed a massive opportunity in the reform of the UK’s banks and has looked more at the symptoms of the financial crisis, rather than the cause. Now this is not a criticism. The report was a thorough piece of work undertaken with the best intentions but which suffered from an over reliance on those institutions that contributed to the financial crisis in the first place and significant (and indeed oscillating) political pressure on the eventual outcomes. However, it does present HM Treasury with a significant amount of work to do over the coming weeks to consider what is missing from the report, not just what is present.

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Monday, 12 September 2011 is going to be interesting. Very interesting. As the culmination of almost 14 months of deliberation, the Independent Commission on Banking (ICB, otherwise known as the Vickers Commission) will be publishing its final recommendations on the reform of the UK banking system. ‘Ring fence’ and ‘account switching’ will once again become phrases ‘du jour’ and we will see the beginning of the next phase of banking reform – legislative scrutiny. The Joint Committee on the Draft Financial Services Bill has already started its own three month project of scrutinising HM Treasury’s planned reforms of the UK financial services regulatory architecture, and we look forward to the House of Lord’s own debate on the ICB’s findings on 15 September 2011. The House of Commons, and the irrepressible Treasury Select Committee will surely not be far behind.

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The phone hacking inquiry notwithstanding, it is almost time for a notable demographic within Westminster Village, our MPs, to return to their constituencies to tend to more pressing local matters for the summer. Indeed both houses of parliament will call a temporary halt to their legislative duties until returning in earnest at the beginning of September, a good month before the usual return, post Conservative Party conference.

However, policy development waits for no man/democratically elected representative and the wheels of deliberation will continue to turn over the ‘sleepy’ month of August. In fact, August is a time when those with a view on policy can make hay, and Intellect intends to do so by continuing to work across a number of areas.

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It is expected that a ring-fence would facilitate the continuation of crucial economic and social functions that the retail arms of universal banks perform, in the event of a failure of the investment banking arm. From providing access to funds for individuals; facilitating personal and commercial transactions; and providing finance to business; banks play a crucial role in the UK’s economy. This was, after all, why the government felt compelled to step in and bail out RBS, HBOS and Northern Rock and it is widely accepted that the consequences for the UK economy had they not done so, would have been significantly worse than what has been seen to date.

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Technorati Tags: banking reform, banks, financial crisis, Independent Commission on Banking, ring fence, risk data

Despite the fact that the financial services sector has spent much of the last three years under the regulatory microscope, you can’t help but feel that the latest round of ‘democratic kickings’ for the ‘Big Four’ banks, by the Treasury Select Committee, marked a small but significant step change in this seemingly perennial process. Or at least it did to me.

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Live from the Intellect/Payments Council ‘Driving Change in Payments 2011′ Conference, Philip Cullum, Deputy Chief Executive of Consumer Focus has set out that its disappointing that there has been little progress in the development of alternative payments systems in the UK to date. The banks, also, have not got off lightly – with the implementation of Faster Payments varying wildy in quality and comprehension across numerous high street banks.

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Just listened to Intellect’s Director General, John Higgins, speak at the inaugural Intellect/Payments Council ‘Driving Change in Payments 2011′ Conference. Good speech, warmly recieved by what looks like almost 150 attendees (plus or minus, the Victoria Line has once again reaped its terrible vengeance). Key points include:

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I’m at the Kings Fund conference centre this morning listening to some incisive speakers ay the Intellect/Payments Council joint conference – Driving Change in Payments 2011 and will, over the course of the day, be reporting some of the highlights, in almost real time.

The conference is the first of its kind – in that it is not looking at what shiny new payments mechanisms are coming to market. Instead is more focused upon getting all concerned parties – from technology vendors, banks, mobile operators, consumers, retailers, charities and many more – in the same room at the same time and learning more about what the current obstacles to the uptake of new, technology-enabled payments mechanisms are. How you pay for ‘stuff’ affects everyone. Therefore everyone has a stake and has concerns, objectives and an idea of what the future of payments looks like. During the duration of this conference, we’ll hear from many of these stakeholders and by the end of the day, hopefully, we’ll have the starting point for a new period of ‘concerted collaboration’.

Watch this space over the course of the day.

The Hargreaves Report, published this week, has gone some way to protecting what is the lifeblood of the technology industry. Yet we have to wonder, has it actually gone far enough? This review, after all, was undertaken because the UK was so far behind the curve in its approach to providing an appropriate legal framework for innovative technology start-ups to flourish. The Hargreaves report was nicknamed the ‘Google review’ after said internet behemoth famously said that they would have been unable to establish themselves in the UK because of our outdated copyright laws.

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