On 12 September 2011, the Independent Commission on Banking published its Final Report setting out the Commission's recommendations on reforms to improve stability and competition in UK banking.
The Final Report followed the Interim Report which was published in April 2011. Allen & Overy's Financial Institutions Group has produced a client alert summarising the Reports recommendations and giving our view on the proposals for ring-fencing retail banking and increasing capital requirements for banks.
We have also produced a paper analysing how a ring-fenced retail bank might be set up, what business it would conduct and how it would interact with other parts of the group.
On 19 December 2011 the UK Government responded to the Final Report. The response strongly endorses the Commission's recommendations on ring-fencing and loss-absorbency but makes some concessions and sets out further consultation plans. The Government also intends to implement a resolution regime for investment banks and financial holding companies. Allen & Overy's Financial Institutions Group has produced a client alert summarising the Government's response.