More banking worries
David Blackburn 2:16pm
George Osborne wrote a strident article for the Observer last weekend, in which he called rich tax evaders “leeches”. As James
Forsyth reveals in the cover story of this week’s magazine, Osborne is not alone among Tories in
hounding the ‘undeserving rich’ at present. James goes on to argue that the Tories are ‘becoming particularly worried’ about the callous rich because the Vickers commission
is poised to bring the emotive issue of banks back to the ‘political frontline’.
The Vickers report has already irritated the coalition’s sore points, with disagreement allegedly rife between George Osborne and Vince Cable. Today’s FT offers a fresh angle. Osborne and Cable are in fact remarkably close in their thinking, both apparently believe that Vickers’ recommendations should be set down in legislation during this parliament and enacted in the second half of this decade.
The government’s unease about Vickers, the FT says, lies with Cameron. The paper reports that Cameron is adamant that nothing must be done that puts jobs and businesses at risk, which is roughly the line that Barclays’ boss Bob Diamond is expected to take when he meets George Osborne for emergency talks on Vickers today. The FT adds that the PM has been receptive to the concerns of banking lobbyists. Cameron is expected to raise these points at the Quad’s meeting next week, according the FT.
Government types certainly are exercised about the issues surrounding the perceived ‘underserving rich’. But, if the FT’s report is accurate, it suggests that Cameron’s premier concern is growth or rather the lack of it.
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Trapped
September 2nd, 2011 2:44pm Report this commentCaving to the demands of the banking sector will not help growth in the true sense of the word. It will just shuffle more imaginary numbers around. At this point the banks need taming and being turned back into a service that benefits the public, as opposed to the public benefiting the service with bailouts and lax regulation.
toco
September 2nd, 2011 3:34pm Report this commentIt is generally accepted that banking reforms are absolutely essential given the disastrous events of recent years.However,we must act in line with our major financial competitors otherwise we are handing millions in taxes and tens of thousands of jobs to Paris,Frankfurt and New York so timing and co-ordination is everything.
Nick
September 2nd, 2011 3:55pm Report this commentThe trouble is that the general public has the perception that it is business as usual for the banks and that no stricter regulatory measures have been imposed on them.
As it happens there has been immense change to the banking industry with Basle 2.5, Basle 3.0, restrictions on renumeration, bank levies, living wills, Capital Requirements Directive 4, new OTC regulations etc etc
AJK
September 2nd, 2011 4:39pm Report this commentHugo Rifkind's article in The Times (£) is very good today. It's time the nasty party got nasty with the bankers is his theme. I agree. I also like his description of Cameron.
We need to relearn the lessons of History. A new Glass-Steagell style Act is needed to separate 'casino' banking from high street banking. Cameron must not be allowed to get flakey with the bankers. Tim Geithner's help is also needed on this one. We can't go through another 2008 again.
Axstane
September 2nd, 2011 5:18pm Report this commentBob Diamond has very much a vested interest in this - his salary and bonuses are over £20,000 per day!
I abhor the undeserving rich talk but Mr Diamond might fit the bill.
On the other hand he did not present us with a bankrupt bank to rescue so he is certainly worth more than many whom we might name.
Reconstruct
September 2nd, 2011 5:35pm Report this commentA shame they won't embrace a radical and free-market solution: not only split commercial banks from investment banks (so your deposits can't be gambled away), but at the same time, give major tax-advantages to money-market mutual funds of all stripes and sizes, and let a new savings/investment market flourish.
Do that, and the Conservatives would do three very useful things. First, they would be dramatically encouraging a rational allocation of savings; second, they would be undercutting the damaging rhetoric of the Left ('You Get the Bonus, not the Banker); and third - and certainly not least - it would allow the City to pioneer a new set of savings/investment vehicles and methods which would underpin its commercial existence for at least a decade.
It would, in short, be a liberating combination of Mrs Thatchers' council-house sales (Hey! Be your own investment advisor), and her pioneering role in privatization.
What's not to like?
disenfranchised
September 2nd, 2011 6:44pm Report this commentthe age of selfishness. fewer and fewer feel any sense of obligation to pay their way. they want all of their ill-gotten gains, feeling no responsibility to contribute to the cost of keeping the country functioning properly.
someone else's problem, not theirs.
they will not go to heaven.....
Baron
September 2nd, 2011 9:25pm Report this commentBaron doesn’t give two hoots about bankers, it’s banking that’s at stake here, not only will the proposals, if they’re what the leaks suggest, hand over an advantage to our competitors, banking that we, the whole world needs if broken down into the two domains is going to make the cost of credit unnecessarily more expensive even if the retail side were to run on a non-profit basis, more to the point, if won’t make the safety of the depositors money any better than the set-up we currently have.
it’s like allowing fast cars for the goers, horse drawn carriages for the widows, orphans on the same road, it will work, but poorly.
the only true capitalistic solution, or to use Reconstruct’s wording ‘market solution’ is to tell the banks, their shareholders, bondholders, depositors they can do what they want, but if they screw up they’ll be on their own, no taxpayers cash to bail them out.
capitalism cannot work guaranteeing any of its key functioning parts an opt-out from failure. Each of you, Baron, companies, the banks take risks daily, that’s what progress demands, the newly created banking retail will take risks, too, and as the Dutch proverb says, ‘man can predict everything but the future’, nobody will be sure the risks for the vanilla retail will come right, if they don’t, we’ll be as screwed up as we were back in 2008, or worse because of a too narrow diversification of assets.
by all means hang few bankers if you must, be careful not to hang out banking to dry as well.
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