Former Bank of England deputy governor Sir John Gieve has argued regulators should focus less on attacking banks over bonuses and concentrate on encouraging an economic recovery.
The Daily Telegraph reports that while Gieve gave moral support for the crackdown on banks, the “softer policy options” of the US were doing more for re-introducing growth than the UK’s strict oversight of the banks.
Speaking at Fathom Consulting’s Monetary Policy Forum event yesterday, Gieve said: “Pressure on liquidity and capital, plus continued debate on what is an allowable banking model, is pushing them to deleverage more than they might be forced to anyway.
“I think this is an area where the US managed, by being rather over generous on any objective basis, to get their banks out of crisis mode and back into lending mode more than we have.
He added: “I would be seeing if there were things we could do… that would be more effective than denouncing them for continuing to pay dividends and bonuses, which is a perfectly valid point but in macroeconomics the job is to get the aggregates to move.”