Introduction In 2007, the United States of America woke up to a financial crisis that resulted from a continuum of malpractices among the financial institutions in the country. The crisis spread to the other countries in the world and this caused a major panic among many world economies; both developing and developed. The worst was yet to come as at the latter stages of the financial crisis various international financial institutions would collapse due to failure in their stress test. This problem meant that millions of people and institutions lost wealth through the various companies’ collapsing stock. Virtually all the economies of the world experienced a negative growth. The effects of the financial global financial crisis continue to be felt to this date and as such various measures have been taken to cushion individuals, institutions and governments from further adverse effects from the crisis or any future economic crunch. Governments have enacted rules and regulations that aim at controlling the financial sector. These measures taken to create a cushion against such effects in the future need to address the problem both regionally and internationally. This is because of the link that exists among the modern day financial institutions of the world. International borrowing is a common phenomenon in the modern day business world and as such, the problem of the international financial crisis needs to be addressed on international fronts. In effect, governments instituted committees and engaged various research firms to come up with reports on the causes of the global financial crisis and the measures that ought to be taken to curb the effects. One such report is the one given by the Independent Commission on banking (ICB). This essay evaluates the economic issues identified in the ICB report on banking that highlighted a number of issues in the way banks and the banking sector, operated in the run up to the economic crunch of 2007. The Independent Commission on Banking report This commission was established by the UK government in June 2010. The main responsibility of the commission was to establish structural and non-structural reforms in the banking sector that would ensure financial stability and competition. The commission came up with an interim and a final report which majorly focused on the reduction of the probability of systemic financial crises in the future, to ensure a constant flow of credit in the real economy and to enable households to manage their financial risks. The commission came up with recommendations that were aimed at providing financial stability to the economy through various measures most of which revolved around government regulations. The main recommendations were to have financial institutions enhance their loss absorbing abilities; make it less costly to help banks that get into financial trouble. These recommendations together with others aimed at improving the competition will be discussed in the ensuing text. The Role of Money and Liquidity in the Economy One of the attributes of money is that it is used as a medium of exchange. This means that all financial transactions take place with money being the measure of value. Money is considered the most liqu