Oct. 4 (Bloomberg) -- Barclays Plc and Royal Bank of Scotland Group Plc said they welcomed the time available to implement recommendations made by the U.K. government-sponsored Independent Commission on Banking.
“The ICB timeline for implementation, which runs until 2019, is also critical for banks to accommodate the changes while continuing to support the economy,” Barclays’s Chief Executive Officer Robert Diamond said in a speech to a Bank of America Corp. conference in London today.
The proposals, which included a separation of banks’ retail businesses from their riskier investment banking operations, must be approved by Parliament. U.K. banks are struggling with declining revenue and the threat of losses related to the European sovereign debt crisis, which is raising the cost of borrowing in the wholesale money markets. The plan is to be implemented by 2019 under the commission’s proposed schedule.
RBS CEO Stephen Hester said flexibility on the proposed firebreak system and long lead time is “helpful” in a speech at the same event.
“Lead time and some ring-fence flexibility is helpful,” Hester said in the presentation. It gives us “enough time to adjust,” he said.
Diamond said there was still the possibility the rules could be enforced in a harsher manner than described, and urged shareholders and bondholders in U.K. banks to “share their views with the U.K. authorities at this stage in the process.”
He reiterated the lender’s target return on equity of 13 percent by 2013.
--Editors: Francis Harris, Steve Bailey
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