Banking reform is still leaving us with a flawed system

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From tomorrow's Observer (but on line tonight):

The significant role that British banks are playing in the Greek financial crisis, as documented in the Observer last week, again highlights the crucial need for the Independent Commission on Banking (ICB) to provide recommendations that will ensure future financial stability.

Ring-fencing retail and investment banking through "Chinese walls", as endorsed by the chancellor, George Osborne, will not produce a banking system that is safe. If companies can continue to move capital between retail and investment banking, the latter could still endanger the former. As a first step, full separation of banking functions is needed to insulate the taxpayer against failure. Full separation would provide depositors with institutions they can trust.

Unlike the US, there has been no independent and systematic analysis of why the crash happened. The ICB has been unable to address issues fundamental to the creation of safe and useful banking. The ICB should call for a further process to correct a wide range of flaws in the financial system left untouched by its inquiry.

Adrian Sanders, Liberal Democrat MP,

Lord Smith, Caroline Lucas, Green party leader, Jon Cruddas, Labour MP and 47 others Linda Jack, Liberal Democrat Federal Policy Committee, Naomi Smith, Social Liberal Forum Simon Hebditch, Social Liberal Forum, Cllr Stephen Knight, leader of the Liberal Democrat Group, Richmond upon Thames, Prof Richard Grayson, Charles Middleton, managing director UK, Triodos Bank, Ray Sheath, managing partner, Social Investment International, Nick Isles, MD Corporate Agenda, Richard Murphy, Director, Tax Research LLP, Jonathan Edwards, Plaid Cymru MP, Mark Durkan, SDLP MP, Mike Wood, Labour MP,Lisa Nandy, Labour MP, Yasmin Qureshi, Labour MP, Professor the Baroness (Ruth) Lister of Burtersett, Andrew Simms, New Economics Foundation, Neal Lawson, Compass, Ruth Potts, The Great Transition, John Kay (journalist and author), Jonathan Perraton, senior lecturer in Economics, University of Sheffield, Prof Doreen Massey, Open University, Dr Charles Dannreuther, School of Politics and International Studies University of Leeds, Hugo Radice, Life Fellow, School of Politics and International Studies, University of Leeds, Howard Reed, Director, Landman Economics, Prof Peter Case, Bristol Business School, Mariana Mazzucato, Professor of Economics, Open University, Professor Jonathan Rutherford of Middlesex University, Ian Gough, LSE, Professor Victoria Chick, UCL, Prem Sikka, Director, Association for Accountancy and Business Affairs, Prof. Giuseppe Fontana, Leeds University Business School, Ismail Erturk, senior lecturer in Banking, Manchester Business School, Chris Edwards, consultant and Senior Fellow, University of East Anglia, Professor Gregor Gall, University of Hertfordshire, Alan Hallsworth, Professor Emeritus, Staffordshire University, Professor Christine Cooper, University of Strathclyde, John Weeks, Professor Emeritus, SOAS, Stewart Lansley, Research Fellow, Bristol University, Geoffrey M Hodgson, Research Professor, University of Hertfordshire Business School, Prof Colin Crouch FBA, University of Warwick Business School, Prof George Irvin, University of London (SOAS), Deborah Doane, Director, World Development Movement, Andy Flanagan, Christian Socialist Movement, Clifford Singer, False Economy, Ben Dyson, Positive Money, Greg Ford, Re-Define, Joe Cox, Campaigns Organiser, Compass