Speaking at the London Stock Exchange this morning, Cable outlined what he would do if he were Chancellor. He said he would break up the part nationalised banks in an attempt to curb their risk profiles and make them more manageable on a regulatory level.
He said: “The European Trade Commissioner has already warned of over concentration in the UK market for – for example – mortgages. The Lloyds-HBOS merger should be unscrambled as part of this process and RBS should also be split with its investment banking operations floated off.”
Cable warned that the large, failed, British banks are “the financial equivalent of Chernobyl”. He said: “To prevent Britain from becoming the next Iceland, radical safety measures are required.”
Cable also attacked today’s announcement from Conservative shadow Chancellor George Osborne, who revealed a Tory Government would scrap the FSA.
Cable called Osborne’s proposal “disruptive”, and said the financial services sector would “despair at the idea of going back to separate, competing, regulators” fighting in a “quango war”.
He said: “I won’t dwell on the structural issues since they are a side issue: the harness rather than the horse. My worry is that we are being deflected from the substance of what sensible regulation means.”