Comments on: Dick Newby writes… Banking – a Lib Dem win

By: richard in norway

richard in norway — Tue, 13 Sep 2011 14:08:57 +0000

Simon

The banks did not trust the rating agency’s, they bribed them

By: richard in norway

richard in norway — Tue, 13 Sep 2011 14:05:26 +0000

I don’t trust this. Why won’t th legislation be enacted now in an emergency session if necessary. The plan is to pass the new law in 2015; call me stupid but it ain’t going to happen and we will go into the election with egg all over our face. Vince should press the button if this is not fasttracked. We have nothing to lose and the public want and expect much more than these proposals. We have an advantage here and we should press it

By: Malcolm Todd

Malcolm Todd — Tue, 13 Sep 2011 13:36:51 +0000

I don’t see how this can be painted as a “straightforward Lib Dem win”, when Cable argued from the outset for banks to be broken up – he’s been forced to accept a “Chinese wall” arrangement that may or may not be any use in achieving an objective that may or may not be desirable in itself. (I really have no opinion on the latter question.) However, it’s probably still more than the Tories want to do, and that’s worth saying.

By: Simon McGrath

Simon McGrath — Tue, 13 Sep 2011 12:15:05 +0000

Tim – my point was that there is no evidence that ‘casino banking’ by which I assume is meant banks trading with their own capital was the cause of the crisis. I agree that the sub prime issue was the main cause of the crisis – the banks were very foolish to trust the credit rating agencies. if you look on P32 of the ICB report where they look at how their proposals would have affected the firms affeted by the crisis in only one case is prop trading mentioned – RBS and there was many other reasosn there, particulalry the takeove rof ABN AMRO.

If you argie for spepeding up the timetble I assume you are happy that the costs will come earlier when we may still be in recession.

By: Bill le Breton

Bill le Breton — Tue, 13 Sep 2011 09:02:57 +0000

We should indeed be grateful to Vince and we should not forget the roles played by Matthew Oakshott and Dick, himself.
The small depositor/saver and the small business should not have to suffer because of the recklessness of self-deluded bankers/chief executives (such as Applegarth and Goodwin) and the incompetence of regulators.
But this Lib Dem triumvirate is also proving what a considerable influence for good and for liberal democracy a ministerial team can be provided that they a) are on the liberal and not neo-liberal side of an issue and b) that they have the courage to use their weight.

By: Double Dip

Double Dip — Tue, 13 Sep 2011 08:59:13 +0000

2019.

All talk and no action yet again.

Vince Cable must be getting used to being humiliated like this.

By: Tim13

Tim13 — Tue, 13 Sep 2011 07:43:46 +0000

Simon – What do you mean – “No evidence”?? There is every evidence that the rolling up of debt in complex instruments misled many people in many places that they were able to hold much more debt than would previously have been the case.

I think Dick Newby is right about a “Lib Dem win” if you merely look at the recent positions of parties and people. But I am afraid it is far less straightforward if you look at the starting positions. I would have thought if you look at Vince’s original “separate the casino and high street banks totally” position and the timescale that has been agreed for a much more limited firewall separation, and when you look at the wider context of the continuation of massive bonuses, particular to senior casino bankers, the banking lobby has managed to hold on to much more for longer than might have been expected. When you consider popular opinion, and media views – very “anti-bankers”, along with the (apparently) adjusted position of Labour, I think this is at best a draw between us and the Tories (with around 50% of their MPs with a financial background of some sort) fighting a populist tide. Sorry, but I would say the Tories have clearly “done well” for “their side”.

There are however, still things to fight for, eg inclusion in the FS Act, trying to speed the timetable up etc.

By: Simon McGrath

Simon McGrath — Tue, 13 Sep 2011 05:27:14 +0000

Pity there is no evidence that ‘casino banking’ caused the crisis. Still as you say it is soemthing vince has been calling for.

And of course the more capital banks need to hold the less lending they can do.

By: George Kendall

George Kendall — Tue, 13 Sep 2011 00:12:08 +0000

@Daniel Henry

I agree. A new government repealing this measure would have huge political problems, unless it was a prominent part of their manifesto. And I’m doubtful that they’d have won, if it was.

Also, unless a new government had a large majority, would they even be able to pass that legislation? They’d be bound to have some rebels.

Even if this is only 80% of what we want, it’s a massive win. Remember we only have 57 MPs. And those 57 have another major achievement to chalk up.

By: Daniel Henry

Daniel Henry — Mon, 12 Sep 2011 22:49:02 +0000

@ Geoffrey
1) I think that the idea is to get legislation passed this parliament, but it gives the banks 5-6 years to make the necessary readjustments and reorganizations to comply.

While it wouldn’t come into effect until a new parliament, a new government would need to pass an act to repeal it which would be HUGELY unpopular, even in the rightwing press.

So long as get the legislation passed within the next year or so I’m happy.

2) You’re right that it’s. not the full separation that we asked for. Perhaps the banking commission had their reasons for rejecting that idea?

So long as it prevents retail holdings from being endangered by investment risks then it’s what we needed, right?

By: Daniel Henry

Daniel Henry — Mon, 12 Sep 2011 22:34:27 +0000

Not counting our chickens just yet. Get it into the Financial Services Bill and we have our win. Until then we can’t afford to be complacent.

Cameron’s position is puzzling me. I’d always gotten the impression that he was happy to ride with bank bashing populist. That he’s willing to publicly admit to wanting to stall, ie going against strong popular opinion, is either a massive favour to Nick or he’s quite strongly against.

We have a good chance though. I think that this is the big issue for Vince. I think he’s gritted his teeth over a lot of compromises in aid if reaching this goal. I get the impression that this is what he’s been reserving his “nuclear option” for.

By: Geoffrey Payne

Geoffrey Payne — Mon, 12 Sep 2011 22:27:32 +0000

I have a few questions about this. One is about the timing. I understand the Vickers recommendation will be implemented by 2018. Before publication the argument was that we needed to do this now, which I imagined to be within a year or 2. Plenty of time for the banks to lobby and a new government to change the policy.
Secondly there is the question of the firewall. I hope it works but it falls short of the complete separation of the retail banking and the casino banking that we originally called for.
At this moment in time I am not sure what to think about this, it was not what I expected or hoped for.