Bank chiefs warn the costs of Vickers will be much higher

Britain's top bank bosses today said they believed that the cost of implementing Sir John Vickers' proposed changes to regulation would be considerably more than his Independent Commission on Banking estimated.

The final Vickers report estimated the costs of ring-fencing retail banking from casino investment banking and extra capital requirements at £4.7 billion.

In replies to the House of Lords Economic Affairs Committee HSBC's chairman and Royal Bank of Scotland's chief executive said they believed the cost could be much higher.

Santander UK chief executive Ana Botin warned the extra costs over Vickers' estimates "could in the future affect investment decisions and, therefore, the size of our UK business".

Douglas Flint, chairman of HSBC, said it calculated that the annual cost of raising extra capital which it did not need for its operations but would have to meet Vickers' proposals would be "in the order of £1.75 billion".

Stephen Hester, chief executive of RBS, told the committee the operational costs of ring-fencing could be £500 million to £1 billion while extra capital could be another £1.25 billion.

Barclays chief executive Bob Diamond said he thought Vickers "a reasonable estimate".