Treasury spokesman
There are many recommendations in it which will help the Government's plan to create a stronger and safer banking system.
"This comprehensive report, produced in less than a year, vindicates the judgment that a parliamentary commission would be swifter and more appropriate than a lengthy public inquiry that others proposed at the time.
"The Government publicly welcomes the Commission's recommendations on increased personal responsibility, especially at a senior level, increased professional judgment by regulators, and better functioning markets.
"We will now get on with a swift response and will report before the summer recess."
Ed Balls, shadow chancellor
After the global financial crisis and the banking scandals that followed we need cultural change and radical reform to protect taxpayers, rebuild public confidence in the banks and ensure that in future they work to support the wider economy.
"This report sets out a radical blueprint for change on professional standards, regulation, competition, pay and accountability. It is vital that the Government and the banks rise to the challenge.
"The Chancellor should now get on and implement this report in the Financial Services Bill currently going through Parliament. And he must rethink his refusal to implement some of the recommendations of the Commission's previous reports, including on the need for a backstop power for full separation of the banks. This is no time to duck radical reform.
"On the future of RBS and Lloyds, it is vital that government decisions are driven by the best interests of the British taxpayer and the wider economy, not a political timetable.
"On RBS in particular, David Cameron and George Osborne must resist the temptation for a loss-making firesale at the current share price which would add billions to the national debt. As Stephen Hester said last week RBS is capable of being worth more than what the taxpayer paid.
"Instead the Government must look at the whole range of options for the future of RBS to ensure the taxpayer gets its money back and there is no return to business as usual. This should include looking at the case for splitting retail and investment banking at RBS, as the Commission proposes.
"Britain needs reformed banks to work for the economy, serve their customers and better support businesses for the long term. That's why the Government, Parliament and the banks must act without delay on the report's recommendations."
Boris Johnson, Mayor of London
This is as an important step towards improved regulation of the financial services sector, and I welcome its focus on good governance, accountability and responsibility.
"I've always asserted that where there is wrongdoing it should be rooted out and punished. Equally we need the City to remain competitive, and this report provides a framework that strengthens standards and secures trust without destroying competition.
"We should applaud the fact that the UK is leading the world on this, but we should be mindful of the need to bring other global financial centres with us on the journey toward better regulation - not light touch, not heavy handed, simply better."
Mark Littlewood, director general at the Institute of Economic Affairs
The Banking Commission seems to be ignoring the lessons of history. Tighter regulation over the past 25 years has not created a more ethical climate and it is a serious mistake to respond to the lack of trust in the financial sector with more intensive regulation.
“The accent on competition and the reinforcement of moves towards the principle of bail-in are both welcome. It should always be the case that investors shoulder their share of the cost of misconduct and incompetence. Taxpayers are rightly being taken off the hook. This report can best be described as a mixed bag.”
Lydia Prieg at the New Economics Foundation
Holding senior bank officials to account is important for justice, but it is unlikely to cause a significant shift in the behaviour of our banks. At the height of the boom, most bankers were not deliberately engaging in wrong-doing, they simply suffered from group-think."
Tom Gosling, head of PricewaterhouseCooper's reward practice
This is a hard-hitting report from the Commission and it's not surprising to see some high profile pay proposals. Overall, the pay proposals are sensible and the Commission has avoided headline-grabbing but unworkable proposals. While some of the recommendations can be implemented within the existing Remuneration Code, others will require new rules, and implementing these within the EU regulatory framework may be challenging. The Commission missed an opportunity to encourage regulators to look more closely at the link between pay and performance at the individual level, which is where culture change bites. But overall the Commission has made a serious and thoughtful contribution.
“UK banks are being overwhelmed by wave after wave of new regulation and it is right that the Commission recognises the risk of over-prescriptive rules. As highlighted in the report, international agreement on remuneration changes is vital to maintaining the UK’s competitive position, but this is likely to be a hard task given the range of international proposals already out there.
“There needs to be an appropriate balance under the new senior persons regime otherwise there is a real risk that these roles become so onerous that no-one will take them on."
Peter Vicary-Smith, Which? chief executive
These proposals could signal the start of the big change in banking that consumers have been crying out for, but more will need to be done to transform the toxic culture at the heart of this industry.
“We welcome the measures on competition and greater senior accountability. But while the report is tough on punishment, it is too weak on prevention. The culture must change to prevent scandals happening in the first place.
“To bring about the necessary cultural change, the Government must go further and bring about a completely independent code of conduct. Anything short of this will have no credibility with the public, who have bailed out the banks and endured shoddy service, mis-selling and sky high charges for far too long.
“We now look to the Government to accept and implement reforms that help consumers without any further delay. We cannot afford to wait for a generation to see integrity and competition injected back into banking."
David Kenmir, banking regulation partner at PwC
The Commission's report is another important milestone in the reform of the UK's banking and regulatory systems. It will be really important for the Government to build upon previous reforms, particularly those emanating from Europe, and to consider the international competitiveness of the UK financial sector, as it decides which of the recommendations should be implemented.
“The proposals relating to corporate governance and senior management within banks were to be expected given what has happened during and since the banking crisis. They will certainly focus the minds of individuals in such positions even more strongly on the way they discharge their responsibilities and the 'risks and rewards' of holding such positions.”
Kevin Burrowes, UK financial services leader at PwC
The government, banks and regulators will welcome the conclusion of the Commission's work, if not all of the recommendations. Although the recommendations address the need for better functioning markets, the Commission could have gone further. Despite attempts to make barriers to entry lower, new entrants will find it very difficult to succeed in the short to medium term.
“Overall, the obstacle course is military grade with some big challenges to leap over, including the overall regulatory regime, the difficulties of establishing successful branch networks which include internet and mobile banking, improving lending to the SME sector and retaining managerial talent in the sector while it remains deeply out of favour.
“This is all aggravated by the continual withdrawal of product choice from the high street and banks being increasingly unable to provide advice to a large number of their customers due to escalating regulatory requirements around advice provision and the resulting costs.
"The measures recommended start to tackle this but perhaps more urgent focus is needed."
