View more on these topics

BBA Conference: Bank aid may need a decade, says Lib Dems

Liberal Democrat shadow chancellor Vince Cable has warned that bank aid may have to continue for 10 years if taxpayers are to receive maximum rewards.

Speaking at this year’s British Bankers Association Conference in London, Cable said that the Government must only take away the semi-nationalised banks’ aid when it can be sure that taxpayers will receive maximum returns from their investments.

He said: “There is a big issue over how quickly these banks return fully to the private sector. Historically, countries that have had these crises in the past – the Swedes, the Koreans, the Americans, the Israelis – they have demonstrated that it may take a decade to get these banks sorted out, to have the bad assets properly managed and to get maximum returns for the taxpayer.”

But Cable warned that the current Government may be in a “dash for cash” whereby it tries to get Northern Rock, RBS and Lloyds Banking Group back into private ownership as soon as it can.

He said: “You have to question seriously whether the Treasury is going to get maximum returns for taxpayers.”

Cable also warned that talk of a ‘recovery’ back to the highs of a few years ago might be foolish – he compared the banking sector to that of a heart attack patient, rather than one with “financial flu”.

He said: “After you have a heart attack you do not go back to normal. So we are also not going back to normal.”


Recommended

Economic sentiment betters across Europe

Economic sentiment in Europe improved in June, but the level is still below the lows reached in the previous trough in 1992. The Economic Sentiment Indicator (ESI), published by the European Commission, increased by 3.2 points in the EU and by 3.1 points in the eurozone, to 71.1 and 73.3 respectively. The indicator is based […]

Craig Inches – thoughts on how to preserve capital and generate income in an inflationary environment

In this short video, Craig Inches, head of short rates and cash at Royal London Asset Management, offers his thoughts on how to preserve capital and generate income in an inflationary environment. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment