Monday, 19 December 2011

Vickers has done for banking, now we must tackle pensions!

A very quick take (it's my day off) on the Government's announcement over the weekend that it intends to implement 'in full' the recommendations of the Vicker's Commission on Banking.

In effect this means we are having a 'Glass Steagall-lite' ringfencing of investment banking from retail banking in the UK.

Two points. Firstly, this is welcome news (well, not for the banks but the rest of us should be happy!) but the worry is that full implementation does not start until 2019. Plenty of time for the influential banking lobby to try and water down the proposals. This Government (or for that matter any future Government) must stand firm.

Secondly, the Observer's story yesterday concerning a leaked powerpoint presentation for the Government put together by Dr Christopher Sier, which details the secret fees being charged on pensions contributions is, to say the least, alarming. Apparently, "the charges are spreading and are so steep that savers may find they get less back in retirement than they invested in savings accounts and pensions over their lifetimes."

All this proves that it is not just those involved in trading complex credit derivatives that need to be brought into line.


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