Martin Wolf was a member of this commission, and he claims, writing in the Financial Times, “…the Independent Commission on Banking made two principal recommendations relating to financial stability: the ringfencing of domestic retail banking from other banking activities…..”.
Er, not quite. The 2nd last paragraph of p. 11 of the ICB final report says, “…lending to large companies outside the financial sector – should be permitted (but not required) within the ring-fence.” And the left hand column of p.54 repeats the point.
“Large companies” (never mind small companies) don’t sound to me like “retail”.
Moreover, half the idea of the ICB was to try to separate high street operations from investment banking. But where do you draw the line between a loan to a business and an investment in the business? If the terms of the loan make the creditor near the last in line for reimbursement in the event of the business failing, the loan becomes very near to being a shareholding.
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