Vickers Report

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Definition: Vickers Report

Sir John Vickers headed an independent commission to look at possible ways to prevent the UK’s banking system from threatening the well being of the entire economy and UK tax payers. The report that he presented is known as Vickers report and some of the key points of that report are:

  • Banks will be forced to “ring-fence” their domestic retail banking business (which directly affects millions of consumers) from their global investment banking and other corporate businesses
  • Banks will be forced to a competition investigation in 2015
  • Capital could be moved from the ring-fenced bank to the investment bank if the capital ratio of the ring-fenced bank did not fall below the 10% minimum
  • Vickers suggested a leverage ratio of 4% of pure equity to gross assets for the banks
  • Certain flexibility has been provided to the banks in the way that they are allowed to decided whether some of their businesses, like providing corporate banking services to corporations, be placed within ring-fence or not

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