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Big issue splits Chancellor and the governor

Chancellor Alistair Darling and Bank of England governor Mervyn King have clashed again on the issue of whether big banks should be split up.

In his Mansion House speech, King called for big banks to be split between investment and retail businesses. He said: “If some banks are thought to be too big to fail, then they are too big. It is not sensible to allow large banks to combine high-street retail banking with risky investment banking. Something must give.”

But in his speech, Darling said: “The solution is not as simple, as some have suggested, as restricting the size of banks. We have learnt that you do not necessarily need to be a big bank to threa- ten to bring the system down.”

The Chancellor welcomed US president Barack Obama’s raft of measures to tighten financial regulation in the US. The proposals would see systemically important firms regulated by the Federal Reserve and forced to hold higher levels of capital. Whether a firm is deemed “systemically important” will depend on its size, links with other institutions and significance of its lending.

Darling made no mention of any further regulatory change in the UK. He said: “Here, we have already tightened up the system.”


Structured switch

Former Keydata consultant Adrian Neave is to join Arbuthnot Banking Group to head its new structured products distribution business.

Cowley takes on OMAM strategic bond funds

Old Mutual Asset Managers head of fixed interest Stewart Cowley has taken over as manager of the group’s global strategic bond and dynamic bond funds.

Reasonable doubt

Risk and cyclically sensitive assets such as equities, credit and commodities have enjoyed a recovery during the second quarter of this year as fears of systemic failure in the financial system are replaced by hopes that the global recession is coming to an end.

US: mid-year review and outlook

By Felix Wintle, Manager of the Neptune US Opportunities Fund H1 2014 Economic data: after last year’s strength, economic data has disappointed. Indeed, the economy contracted 2.9 per cent in the first three months of the year — the US economy’s worst performance for five years. However, rather than a symptom of underlying economic weakness or […]


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