Government to respond to ICB recommendations 'by the end of the year'

In a statement to the House of Commons, George Osborne said that any legislation needed to bring into force changes recommended by Sir John Vickers and the Independent Commission on Banking (ICB) would be published in this Parliament.

However, he stressed that the "right timetable" was needed, and that any changes to the UK banking system would not be completed until the report's deadline of 2019.

Chancellor George Osborne called the ICB report an "impressive piece of work" and thanked the members of the Commission for "a job well done" in his statement to the House of Commons.

The Government welcomed all of the recommendations in principle, he said, but cautioned that "a great deal of detailed work" was now required to see how they could be put into practice.

The ICB was set up by the Government last year to "learn the lessons of what went to catastrophically wrong", Osborne said.

Its report, published on Monday, recommended 'ring fencing' the customer-facing activities of large banks to an independent subsidiary.

In his statement, the Chancellor acknowledged that some of the ICB's recommendations could "reduce the profitability" of investment banking. However, he restated his commitment to making the City of London the "pre-eminent global centre for banking and finance".

Regardless of the reforms "the global investment banking operations of UK banks can continue to be as competitive as any in the world", he said.