LONDON (Management Today) The Independent Commission on Banking says banks must ring-fence their investment and retail operations by 2019. Which might not be soon enough… ?The most radical reform of British banks in a generation, and possibly ever,? was Robert Peston?s rather breathless description of recommendations made by Sir John Vickers and the Independent Commission on Banking. The report, published this morning, sets out plans whereby banks would be forced to ring-fence their retail (aka high street) and investment operations, the idea being that in the event of another banking crisis, savers will be protected. But with a storm a-brewing in the eurozone, critics have said the measures aren?t stringent enough to prevent another crisis? Under the ICB?s measures, banks will have until 2019 (as mooted by George Osborne some time ago) to erect a ?firewall? between their investment and retail arms. It adds that banks will be forced to ?further shore up their retail operations? with capital buffers which are equivalent to at least 10% of their assets, weighted based on risk. Admittedly, the measures are as near as dammit to simply forcing them to separate entirely: the new retail banks will even be run by their own boards, which will have an independent set of non-executive directors. Banks, though, aren?t too impressed with the reforms, their argument being that they can?t afford the estimated œ4bn-œ7bn price tag at the moment, and with the eurozone teetering on the brink of another credit crisis and the UK economy poised to slip into recession, they say they need to be given as much free rein as possible to keep bolstering growth. Critics have also pointed out that reforms like this wouldn?t have prevented the likes of Northern Rock and Bradford & Bingley from collapse: both of those were brought down by problems in their retail arms. Given recent market turmoil, then, it?s telling that, in comparison to his interim report in April, Vickers makes several concessions to the banks. To begin with, he gives lenders plenty of flexibility over where the ring-fence sits: banks can choose whether they?d like their corporate lending activities to sit inside the fence. And while originally, the ICB had suggested that Lloyds should be forced to sell off more than the 632 branches it?s being forced to offload by EU regulators, there?s little mention of that in the report. So it clearly recognises that banks are likely to struggle over the next few months. But some see that as a cop-out. It?s no secret that business secretary Vince Cable had originally hoped to implement the reforms before the end of this parliament, so the fact that banks have been given eight years to change is going to come as a bit of a blow to him. (Although some reckon it might not be long enough: Andrew Tyrie, chairman of the Commons Treasury Select Committee, told The Times that ?based on the current dysfunctionality of British banks, that date might be a little early?). If there?s another banking crisis during that time, there will still need to be bail-outs a-plenty. Let?s just hope that things calm down for a few years, then, eh? If the Government accepts the recommendations alongside the Basel III requirements (also set to be implemented in 2019), the UK will become one of the strictest financial systems in Europe. Whether that?ll cause banks to make good on those threats to up sticks to Switzerland or Shanghai isn?t clear yet. As Tyrie pointed out: ?nobody knows what the effect will be?.