Mark Littlewood writes for the Daily Express

The ringfencing or firewalling proposed by Sir John Vickers’ Independent Commission on Banking could become a £7billion a year red herring. That’s a very high cost for a policy with very little merit.

What is needed is a robust procedure to ensure that if and when a bank fails, it can be wound up in orderly fashion without the taxpayer being asked to foot the bill. The challenge is not to make banking safer; it’s to ensure the wider economy isn’t threatened when a bank hits the buffers.

There is a misguided belief that banking can be split neatly into two separate categories. Retail banking – the day-to-day side of things that most of us are familiar with such as current accounts, mortgages and the like – and dangerous, high-risk investment banking.  But in reality all banking involves some sort of risk.

Northern Rock was a retail bank, which found its jaw-dropping offer of mortgages – worth more than 100 per cent of the value of the accompanying property – were wholly unsustainable.

Of course Sir John and his fellow banking commissioners are no fools. They know that banking can’t be divided into zero-risk activities and casino-type betting. Even they acknowledge that certain types of assets currently held by UK banks should be considered “flexible”.

Read the rest of the article on the Daily Express website.