CBI: Govt would be "barking mad" to rush ringfencing plans
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The Confederation of British Industry says the Government would be “barking mad” to push forward with plans to ringfence UK banks given the current economic conditions.
In an interview with the Financial Times, CBI director general John Cridland warns it would be wrong to implement Sir John Vickers’ expected proposals to separate the retail and investment arms of banks in the midst of the current European debt crisis.
He says: “Taking action at this moment – this moment of growth peril, which weakens the ability of banks in Britain to provide the finance that businesses need to grow – is just to me barking mad.”
Over the weekend, British Bankers’ Association chief executive Angela Knight also called for a delay in implementing Vickers’ plans. She says: “We have a high degree of uncertainty, market turbulence and lack of confidence that governments in other countries have got a sufficient grip on their economies. We are in for a very difficult autumn.”
Vickers’ Independent Commission on Banking is due to produce its final report by the middle of September.
Chancellor George Osborne signalled his backing for the ringfencing plan at a Mansion House address in June. Osborne is reported to favour giving banks extra time to prepare for the new regime, perhaps until 2019, whilst Business Secretary Vince Cable supports a quicker implementation.
The Guardian reports an aide to Cable as saying the current market turmoil is no excuse to delay ringfencing plans.
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Readers' comments (3)
an old IFA | 30 Aug 2011 9:36 am
Personnally I'm for ring fencing, but knowing that Cable and Osbourne are for it makes me wonder if I should be!
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Anonymous | 30 Aug 2011 9:45 am
Cable has proven himself to be a total twit since the election. Initially he was seen as some kind of guru - for stating the bleedin' obvious, picking up on the public mood concerning banking excesses and knocking the dismal record of the Labour government in allowing national debt to balloon out of control. Now he is showing his real colours and his lack of understanding of how the economy actually works - putting ideology before pragmatism is a recipe for disaster.
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Nigel Barker-Smith | 31 Aug 2011 2:48 pm
I don't mind banks making nor privatising profits but I do mind banks asking the public to pick up the losses and debts.
The sooner the investment casinos and split from the high street deposits the better.
I'm sorry "anonymous", but practicality is nothing more than a smoke screen and the delaying of hiving off bonuses whilst the public sector takes the risk.
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