Chaos: Vince Cable has said the crisis in the eurozone firmly underscored the need for reforms to strengthen banks and protect taxpayers
Πηγή: The Mail Online
By Daniel Martin
31st August 2011
Vince Cable has accused banks of trying to use the euro crisis and ensuing economic uncertainty as a reason to delay key reforms.
An official report is expected to recommend that financial giants must split up their high street and investment banking operations.
But banks argue that the recovery is so precarious that the focus should be on lending rather than on regulation.
Dr Cable dismissed this lobbying, saying the chaos underscored the need for reforms to strengthen banks and protect taxpayers.
The Liberal Democrat Business Secretary said he did not expect a 2008-style meltdown and decried 'doomsters' who predicted one.
In an interview with The Times, he said: 'The greater worry is not a massive financial crisis again but it is a general slowing down of Western economies, with all the problems that presents for employment and long-term dynamism.'
He said 'louder and louder voices' were being raised among a handful of big banks giving warning that regulatory reform would derail the recovery.
'It is disingenuous in the extreme to use the current context to argue against reform. Banks are, in a way, trying to create a panic around something which they know has got to happen,' he added.
'The Governor of the Bank of England and many other people have been arguing that we have to deal with the too-big-to-fail problem.
'We can't have big global banks with balance sheets bigger than British GDP underwritten by the taxpayer; this can’t go on and it has got to be dealt with.'
Dr Cable said the inquiry led by Sir John Vickers had made a very strong case for separating retail banking from investment banking, and that the argument now would be how severe the separation should be.
Angela Knight, the chief executive of the British Bankers’ Association, has argued that allowing lenders to finance the economic recovery should be the priority, not more regulation
And John Cridland, of the CBI, said that taking action on regulation in the current climate was 'barking mad'.
Dr Cable's comments come after the most turbulent period for the financial sector since autumn 2008 when the collapse of the banks led to the worst downturn since the Second World War.
Political feuding over the Greek bailout has led to a loss of market confidence in some governments in the eurozone, most damagingly Italy and Spain, triggering a 14 per cent fall in the FTSE 100 index.
Asked about Britain’s economic outlook, Dr Cable said that he would release a pamphlet next month discussing ways of fostering more sustainable growth, adding that boosting investment in infrastructure was a priority.
He also attacked rural lobby groups opposed to planning reforms, saying that new homes, in particular social housing, were needed where there was chronic shortage.
