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into a system of big banks with nationwide branches, the British banking system became
impressively stable [Casserley, Härle, Macdonald]. The separation of investment and
commercial banking in Britain had always been a matter of convention rather than law. During
the 1960s and 1970s the clearing banks started to provide a variety of loans moving into
consumer finance, mortgages, and medium-term business loans. They also made their first
steps into investment banking. The rise of the Eurodollar market attracted numerous foreign
banks and introduced the practice of longer-term loans funded on a revolving basis. By the
1980s the only barrier to the creation of fully integrated banks was posed by the internal rules
of the London Stock Exchange, requiring clear obligation, whether they operate as brokers or as
market makers. Those limitations had been broken down in 1986 with “Big Bang”, starting
massive operations of universal banks on financial markets. By the time of the financial crisis
2008 all of them had become universal banks, however with very different contribution of
commercial and investment activities.
Official bodies about separation after the crisis of 2008
The most spectacular pillars of word-wide debate in the aftermath of the crisis 2008 have
become reports elaborated by works of a few groups, established by official bodies in the
European Union, the United States and Great Britain. They became the basis for reconstruction
of banking jurisdictions and regulatory measures, both at the national and supranational level.
De Larosiere Report [The High-level Group ... 2009] has been published on 25th of February
2009 as a result of the work of the group appointed in 2008 by the President of the European
Commission under the leadership of Jacques de Larosiere. The group’s task was to define
proposals and recommendations on the future of financial market regulation and financial
supervision in Europe. The outcome was the set of 31 recommendations. Many of them had
been later on included in the regulatory system of the European Union. However,
recommendations haven't embraced any references to the paradigm shift in the functioning of
banks. Instead of taking active systemic actions, implementation of the tighter and more
restrictive regulatory and supervisory framework was recommended. In the recommendation
26th the authors suggested: „Barring a fundamental change in the ways that banks operate,
the Group recommends that the colleges of supervisors for large complex cross-border financial
groups currently being set up at the international level should carry out robust comprehensive
risk assessments, should pay greater attention to banks' internal risk management practices
and should agree on a common approach to promoting incentive alignment in private sector
remuneration schemes via pillar 2 of Basel 2.” Not taking into account of excessive complexity
of financial institutions, combining the commercial and investment activities, has become one
of the objects of criticism de Larosiere report [Acharya, 2009].
In February 2009 Paul Volcker, former chairman of the Federal Reserve System, headed the
Economic Recovery Advisory Board by the President of the United States. Undertaking the task
of structural reform of the banking sector after the crisis, Volcker’s group focused mainly on the
problem of the large and closely coupled groups of capital taking with impunity excessive risk. It
is the risk taken and the method of its limitations have been included in the so-called Volcker
Rule [Elliot, 2011], which was later to a large extent implemented in the Dodd Frank Act
[Benson, Michaels, 2013]. Composed of hundreds of rules it returned to the spirit of the Glass
Steagall Act of 1933. Entered into force in April 2014 imposed on banks a number of limitations
related to the investment activities [How Will the Volcker Rule…+. The most important include:
limit of investment in venture capital funds (3 percent of equity),
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