Bank system ‘is still not safe’

A KEY architect of British banking reform after the financial crisis has warned the system is still not safe.

Sir John Vickers said large lenders do not have big enough reserves of cash to protect them from collapse in the next downturn, disagreeing with the Bank of England’s views that they do.

Vickers, who chaired a commission on banking after the crisis, looked at different measures to the ones used by the central bank.

He said the Bank of England’s annual stress tests, which model how big lenders would cope in a doomsday scenario, are not severe enough to show what would happen in real life.

The economist said: ‘If we had another systemic crisis anything like the last one, goodness knows what would happen.’