Business secretary Vince Cable has vowed to impose tough reforms on Britain’s biggest banks, stressing that there is “no way of going back to the status quo”.
Last weekend, in his first newspaper interview since being appointed business secretary, Cable told the Financial Times that the banks faced being broken up, tougher lending controls and curbs on bonuses.
He believes a key priority will be to force the banks to lend more to business. He said: “The banks are just not performing.”
He acknowledged this could affect the profitability of Government-backed banks Royal Bank of Scotland and Lloyds but said there would be concrete changes, even if Britain failed to secure international agreement.
He said: “We are not going back to business as usual. The sector is going to have to accept regulatory disciplines on the way it operates and there is going to be a restructuring.”
Before the election, Cable was a fierce critic of Tory plans to offer the public discounted shares in state-backed banks. At the time, he said it was likely to be around five years before RBS was back in private ownership.