An electric fence to keep the City of London’s light from dimming

The Parliamentary Commission on Banking Standards was conceived in those tumultuous days following the first Libor revelations. At the time, some hoped that its report would lay the blame squarely at the feet of a certain former city minister. But the cross-party committee of peers and MPs has produced a sober report this morning which makes for relatively comfortable reading for those Labour politicians whose regulatory system saw the birth of Libor rigging as it does not name them. It is slightly less comfortable for the Coalition, which now has to consider whether to beef up its existing plans for banking reform.

It doesn’t contradict the spirit of the Vickers reforms, but it does go further, calling for an ‘electrified’ ring fence between the retail and investment arms of the banks. This electrification includes legislation to ensure that the banks ‘comply not just with the rules of the ring-fence, but also with their spirit’.