Point of No Return for UK Banks

Michelle Remo, “Big 4″ observer
December 29, 2011 /

The face of banking in United Kingdom has “fundamentally changed”, paving the way for the need for them “to wake up on living wills,” according to KPMG UK.

Jon Pain, UK head of financial services risk consulting at KPMG, said: “The green light has been given for the main proposals of the ICB to be implemented.

“Treasury’s endorsement has closely followed the Commission’s recommendations with eased-off bail-in debt proposals seeming to be the only major reprieve banks have won.

“The face and structure of banking has changed for good and we’ve reached a point of no return. This will be remembered as a defining moment for banks in the UK and work will intensify as business models need to be fundamentally overhauled.

“Banks should not be fooled by the ICB timetable as major banks will need to make some serious decisions before June to submit their recovery and resolution plans (RRPs) to the relevant authorities, which could have major implications for their ICB thinking.

“UK global systemically important banks have six months to get their RRPs in order, or risk facing an additional capital resolution buffer both inside and outside the ring-fence.”


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