A distant view

CHANCELLOR George Osborne's reaction to the report of the Independent Commission on Banking, published yesterday, was surprisingly robust -- at first sight. The report recommended a greater separation of retail banking (yours and mine) and investment banking which involves considerable risk but also commensurate gain.

It was the merger of these two very different banking activities that led to the crisis in Britain in 2007/08 which required substantial support from the government. Earlier, Mr Osborne had given the impression that he rather agreed with the banks' opposition to such “ring fencing” but yesterday he endorsed the report quite strongly. The reason he was comfortable in doing this could perhaps be seen in the time-table.

The target for implementation of the new arrangement is 2019, or two parliaments from now; there are words about new laws “needing to be carefully thought through” and even a verbal reminder that financial conditions may be very different in a decade. Uncertainly about who will meet the anticipated 10 billion pounds cost of the necessary reforms -- the banks or the government, or shared -- could also slow down the pace of change. Still, the principle has been established. Last week Ed Miliband suggested that bankers should have a code of conduct like doctors and solicitors and be struck-off if they offended its provisions. There is nothing of that kind in the report!