The delusional Vickers Commission.

The UK’s Vickers Commission was the equivalent of Dodd-Frank in the US. Dodd-Frank was so hopeless that Richard Fisher of the Dallas Fed said, “..the act has made things worse, not better”.

As for Vickers, I particularly like this passage from section A3.3:

“On structure, the proposal is for a ring-fence which would allow vital banking services such as deposits of individuals and small and medium size enterprises to be provided continuously, without the provision of taxpayer support, and insulate them from shocks elsewhere in the financial system.”

Dear oh dear. The taxpayer funded deposit guarantee that operates in the UK is a form of “taxpayer support” for banking. Nowhere in the Vickers report is there any suggestion that that guarantee be removed.

Second, lender of last resort is another form of public support for private banks. Or to be accurate, lender of last resort is not a subsidy if the support or loans to private banks by the central bank is at a penalty rate of interest. But of course it’s not. Again, no suggestion in the Vickers report that that form of support be removed. Indeed, the phrase “lender of last resort” does not appear in the Vickers report.

The Vickers commission clearly wouldn’t recognise “taxpayer support” if it stared it in the face.