Lawrence Kotlikoff ridicules Vickers.

Quite right. See here.

The U.K.’s “Independent Commission on Banking” (often called the Vickers commission after the surname of its chairman) advocated a partial separation of High Street or retail banking from casino or investment banking.

As has been pointed about five hundred times by as many different individuals, that sort of separation, even if complete (a la Glass-Steagall) would not have stopped the credit crunch. Reason is that even if banks cannot use the money in grandma’s account for INVESTING, there are still plenty of silly things banks can do.

Look at Ireland and Spain. Banks there basically LENT TO property ventures, rather than actually invest or buy shares in property businesses. So Vickers would not have prevented the banking fiasco in Spain or Ireland.

In fact Vickers specifically allows banks to lend to any business (bar financial business) in Europe.


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