LONDON — The head of a commission looking into the potential breakup of Britain’s biggest banks says reforms are necessary to allow unsuccessful financial institutions to “fail safely.”
John Vickers, who heads the Independent Commission on Banking, says financial risks should not be borne by a “generous safety net” provided by taxpayers.
He says one way to reduce the danger of banks failing would be to separate banks’ retail and investment banking businesses.
Vickers said Saturday the banking sector failed “spectacularly” to manage risks in the lead-up to the banking crisis.
The banking commission was formed last summer to consider reforms that would promote financial stability and competition. It is due to issue recommendations in September.