LONDON, Jan 26 (Reuters) - Opinion remains divided over whether or not Britain should take steps to split companies’ retail banking arms from their investment banking units, the UK’s Independent Commission on Banking (ICB) said on Wednesday.
Britain set up the ICB last year to examine a possible shake-up of the sector following the credit crisis, which saw top banks such as Royal Bank of Scotland (RBS.L) and Lloyds (LLOY.L) needing bailouts.
On Wednesday, the ICB published submissions given to it during the course of its enquiries.
“There was considerable interest, both positive and negative, in the question of splitting retail and investment banks,” the ICB said in a statement.
“Many in favour of a split argued that there is a funding subsidy provided by retail deposits, and that there should be separation of risk and reward for universal bank employees risking shareholder capital. Others in favour of a split argued that the implicit ‘too big to fail’ guarantee was market distorting,” it said.
However, the ICB said others felt a split would harm Britain’s role as a leading global financial centre and could prove to be too costly to undertake. (Reporting by Sudip Kar-Gupta; Editing by David Holmes)