Fight-back Against UK Bank Ring-fencing
Business groups have launched an all-out attack on regulatory efforts underway in Britain as they urge the government to ignore proposals due from an independent banking commission next month.
Chris Cummings, chief executive of London industry association TheCityUK, writing in Global Financial Strategy on Tuesday, urges the government to ditch a suggestion to ring-fence banks' retail and investment operations.
His comments echo criticism by the British Bankers' Association and Confederation of British Industry, which claimed that the measures first proposed by the Independent Commission on Banking in its interim April report were "barking mad".
The comments come as bank shares rose dramatically in early trading on Tuesday, with state-owned Royal Bank of Scotland gaining more than 8 per cent.
Cummings, warning that the banking industry is being treated as if it were a "pantomime villain", says that any ring-fencing will "simply drive up costs and make the UK an uncompetitive place to run a bank".
"The commentators who urge this are baying for pain to be inflicted on banks, without consideration of how it will affect others. I can suggest ways it will affect banks - they will feel less inclined to base their operations in the UK - and with them would go tax and jobs.
"Some may think that is a price worth paying, but that is the voice of spite not reason. Perhaps those same commentators will be more inclined to think on the impact on the customer who could quickly see the end of free banking for those in credit in the UK, and less capital for loans to small businesses."
Cummings also attacks a Franco-German bid for a European financial transaction tax as "a marvellous formula for pricing European-based organisations out of the world markets".
On Monday, Angela Knight, chief executive of the British Bankers' Association, claimed that regulatory change is in danger of undermining the country's fragile economy recovery, and urged the government to resist measures which increased the costs of banking.
There is consensus among regulators and banks that the country's three main priorities should be financial stability, economic recovery, and regulatory reform that is "fit for purpose", she said.
- Xero to Acquire HubDoc in Deal Worth $70m
- FRC Imposes Fine of £18m on Audit Firms during the Previous Year
- More than One Million Married and Civil Partnered couples Failed in taking Advantage of the Marriage Allowance
- SEC Fines the Swiss Investment Bank $30m Over Bribery Charges
- Simplified Contract to Aid SMEs Wanting to Apply for Government Work
- Commission Opens an Inquiry against Charity over Poor Financial Controls
- EU Introduces New Laws Regarding Money Laundering Sanctions