The independent UK Banking Commission on the future structure of the UK financial market (ICB) has published its report.

The final report of the independent UK Banking Commission, chaired by Sir John Vickers, former head of the UK's competition watchdog, has now been published. The Committee, among other things, proposes that a separation be established between commercial and investment banking within the same group, by requiring that traditional commercial banking is conducted in a separate subsidiary subject to specific capital requirements. The Commission believes that this proposal will significantly reduce the systemic risk from riskier positions in investment banking.

The Committee places great emphasis on competition issues. It recommends, among other things, that the UK government ensures, in its agreements with the country's largest bank, Lloyds Banking Group, that the sale of part of the bank's assets leads to a strengthening of the competitive position of its rivals and thereby strengthens competition in the market. Furthermore, the Committee believes that barriers to entry in the banking market and the cost to consumers of switching banks are significantly detrimental to competition in the market. The Committee recommends that switching costs be reduced by requiring banks to ensure that the transfer of customers between banks is quick and smooth.

Finally, the Commission recommends that the Competition Commission launches a special investigation into the banking market no later than 2015 if changes to Lloyds Banking Group have not by then led to the emergence of strong competitors and the removal of barriers to competition, such as switching costs, have not been reduced. The Competition Commission has, among other powers, the authority to break up companies.

The report of the committee may find here.