Treasury select committee chairman John McFall is saved by the division bell ringing when Money Marketing arrives at Portcullis House and dashes straight out for a vote on climate change.
After a half-hour wait, McFall returns breathless and full of apologies and says his week has been non-stop so far.
He launches straight into the hot topic of the day, Bank of England governor Mervyn King’s call to split up the banks and the Prime Minister’s opposition to King’s proposals.
He says: “The issue of too big to fail has to be addressed. If we do not address that, then we could find ourselves with another financial crisis around the corner because these banks have got the taxpayer to rely on if things go wrong so the taxpayer is on the hook.
“Do we change this system? Do we have a market system? Or do we have a system akin to communism where it is rich rewards for the investment banks collectively guaranteed?”
Disaster insurance is one potential solution, in his view, where countries impose taxation on banks for insuring them in the event of a crisis. But he does not know what the definitive answer should be, although he believes it is necessary for the solution to have an international dimension.
He has concerns that the Conservatives’ proposals to overhaul the regulatory system could undermine the UK’s recovery.
“We will have a perilous financial environment if the Tories implement these policies as they say they are going to do and, given that the world economy is still not out of the woods, it just seems a bit short-sighted and reckless.”
McFall thinks the concept of a single regulator is very important because there is a tendency for overlap and a lack of efficiency when more than one regulator gets involved.
But he says it is necessary to “fuse” the FSA and the Bank of England to ensure there is a more intimate relationship between them.
“I am not just talking about a bridge by token representation of the chief executive of the FSA in the Bank of England on the financial stability board or having a deputy governor of the Bank of England in the FSA. I am talking about managerial and work integration.”
Moving on to the FSA’s mortgage market review paper published last week, McFall says the clampdown on self-certification is “a shot in the dark” for the regulator.
He says: “I do not think they want to get caught out and rightly so because they have been criticised enormously in the past year or two . They have got to show that they have got a responsibility in terms of their assessment of the mortgage market and the affordability of mortgages for individuals.
“I think the balance in the past has been too much towards the sale of it rather than an assessment of it and what the implications are for ind- ividuals in terms of paying back and I think that bringing it into balance is very important.”
He is “delighted” that the Prime Minister took up his suggestion to give the Post Office a bigger role in financial services in his speech at the Labour party conference last month in Brighton.
“I think the Post Office needs to establish itself and consolidate its position and not be relying on the Government in the medium to longer term for support so I think it needs to become a universal financial service provider.
“Given that the reach of the Post Office is unlike any other and it can reach across the middle class and the lower income as well, I think the opportunity is there.”
McFall will be stepping down from his role as select committee chairman when the general election is called because he has served for the maximum length of time allowed, which is two Parliaments.
One of the things he is most proud of achieving in his time as chairman is extending the remit of the committee and developing a bridge between Parliament and the public.
When the tripartite authority came before the committee, McFall asked the public to submit their questions for the Chancellor, the FSA and the Bank of England and received an overwhelming 6,000 responses.
“I would like to think that we had contributed to changing the culture in the financial services industry. That is no easy task and it cannot be done over a short period of time.
“The committee has also taken up the issue of financial inclusion quite vigorously, which may be surprising for a Treasury committee to do that.”
McFall says it is necessary to get better at anticipating asset bubbles to avoid the next financial crisis.
He ends with a quote from the former US Federal Reserve chairman William McChesney Martin who said: “The regulator has got to be there to take the punchbowl away when the party is in full swing.”
And off he rushes again, this time back to his West Dunbartonshire constituency.