My response to the Parliamentary Commission on Banking Standards report

After the global financial crisis and the banking scandals that followed we need cultural change and radical reform to protect taxpayers, rebuild public confidence in the banks and ensure that in future they work to support the wider economy.

This report sets out a radical blueprint for change on professional standards, regulation, competition, pay and accountability. It is vital that the Government and the banks rise to the challenge.

The Chancellor should now get on and implement this report in the Financial Services Bill currently going through Parliament. And he must rethink his refusal to implement some of the recommendations of the Commission’s previous reports, including on the need for a backstop power for full separation of the banks. This is no time to duck radical reform.

On the future of RBS and Lloyds, it is vital that government decisions are driven by the best interests of the British taxpayer and the wider economy, not a political timetable. On RBS in particular, David Cameron and George Osborne must resist the temptation for a loss-making firesale at the current share price which would add billions to the national debt. As Stephen Hester said last week RBS is capable of being worth more than what the taxpayer paid.

Instead the Government must look at the whole range of options for the future of RBS to ensure the taxpayer gets its money back and there is no return to business as usual. This should include looking at the case for splitting retail and investment banking at RBS, as the Commission proposes.

Britain needs reformed banks to work for the economy, serve their customers and better support businesses for the long term. That’s why the Government, Parliament and the banks must act without delay on the report’s recommendations.

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Posted June 19th, 2013 by Ed