Banks to be broken up?

The BBC reports, "The head of the commission reviewing whether the UK's biggest banks should be broken up is expected to say later that wide-ranging reform is needed. In a speech in London, Sir John Vickers is set to confirm he is considering plans to separate banks' trading and retail operations."

We've got big banks but it's not certain whether there is adequate competition. Santander took over a bunch of banks and now most high streets have three Santander branches, maybe with two stuck beside each other. Do banks compete? Or are they all they same?

Fractional reserve banking means that they can make money out of very little. But that's to suit themselves. If HSBC was broken up, we might get the Hong, the Kong, the Shang and the Hai banks, but would we notice any difference? I don't think so! We need root and branch reform, not just cosmetic tweaking.

HSBC has warned it would consider moving its headquarters from the UK if the commission recommended a break-up. Hong Kong or Shanghai boys?

Posted in: