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Independent Commission on Banking

My Lords, I welcome the Government’s response. It is an important step, but only a first step, to what surely must be full separation of the banks. That is the logic of the Vickers report and is, I should point out, the logic of the Government’s response, which states: "““The Government believes that the ring-fenced bank should not be dependent on the financial health of the rest of its corporate group for its solvency or liquidity””." If that is to be achieved, the treasury function, which is right at the heart of banking, would need to be split and there would need to be two treasury functions. Similarly, loan capital would have to be provided separately to the high street bank. That would simply leave the question that my noble friend Lord Eatwell raised: what happens to the capital in the event that the holding company goes under? Surely, the logic of this is to separate these two completely. Can the Minister confirm that banks would be required to separate the treasury function, whereby loan capital will have to be raised separately for the high street bank?