Our own financial services sector needs reform. Our big banks were at the very centre of the financial crisis, what the Europeans call Anglo-Saxon financial capitalism. It needs reform, Liberal Democrat minister Cable told the BBC.
Thats why tomorrow, the government is going to launch this initiative on the banks accepting in full the Vickers commission. Were going to proceed with the separation of the banks, the casinos and the retail business lending parts of the bank, he added.
In September, the ICB - headed by Oxford University academic Sir John Vickers - said top banks should ring-fence or protect their retail banking operations from their riskier investment banking arms, in order to give better protection to taxpayers in case of future financial crises.
It said banks should hold core capital of 10 percent, plus a further 7 to 10 percent of capital that could take the form of bail-in bonds - debt that can take a loss or convert into equity to recapitalise a bank if it hits trouble.
There would also be limits to the extent to which a bank could use money in its retail arm for its investment bank - a move that will increase funding costs for British lenders.
The ICB stopped short of seeking a full split of a retail and investment bank into two, separate companies. Instead, it said banks could keep their parent holding company but should set a ring-fence between the retail and investment arms.
Britains top banks - Barclays, HSBC, and part-nationalised lenders Royal Bank of Scotland and Lloyds - have lobbied against much of the reforms.
They have argued they could be put at a competitive disadvantage to rivals in Europe, Asia and the United States, who do not face the same sort of shake-up. The Conservative/Liberal Democrat coalition government set up the ICB after the 2007-2008 credit crisis saw Britain have to nationalise Northern Rock and part-nationalise RBS and Lloyds, with 66 billion pounds of taxpayers money pumped into RBS and Lloyds.
The proposals would see Britain follow Switzerland and Sweden in setting a benchmark in capital rules on banks, since the size of each of those countries bank sectors is greater than their national GDP (gross domestic product), thereby creating a greater risk for taxpayers.
The ICB has recommended that its reforms be adopted by 2019.
Its proposal for stricter capital requirements follows a similar move by the Basel committee of global banking regulators, who have also set a 2019 timetable on this.
But the banks have said the costs of the reforms could make it harder for them to lend to businesses and customers, and could therefore damage the overall economy.
They have said that the costs would be more than the top end of the 4-7 billion pounds estimated by the ICB.
The proposal on bail in debt has been attacked by HSBC and Standard Chartered, who have warned they could quit their London headquarters for rival business centres in Asia, where they make much of their profits.
HSBC estimates that holding 'bail-in debt would cost it at least $2.1 billion a year, while Barclays said the cost would be at least 1 billion pounds.
Standard Chartered said the ICBs proposals were flawed in maths and logic and that Britain should wait for international rules on bail-in debt.
Cable said the new banking legislation caused by the ICBs reforms would be completed within the lifetime of the current parliament, namely before 2015.
Its got to be done. We cant be in a position where the big banks are too big to fail. We just cannot risk having a repetition of that financial catastrophe that we had three years ago, he said.
The issue of banking reform has caused tension between the Liberal Democrats and the Conservatives, who lead the coalition.
Cable has consistently been a fierce critic of the banks than Chancellor George Osborne.
Osborne is due to present the governments formal response to the ICB in a statement to parliament on Monday afternoon.
London mayor Boris Johnson warned against excessive 'banker-bashing, while admitting there was something creepy about bankers receiving huge bonuses while increasing numbers of Britons face unemployment.
Just dont kill the goose, he told the BBC.