[email protected]: Nick Clegg – It’s time for a truly different banking system

Over at the Yorkshire Post, Lib Dem leader Nick Clegg argues that, after a decade when British banks have been allowed to get away with far too much, it’s high time for real reform of the banking industry. Here’s an excerpt:

I want a return to old-style high street banks so people’s savings are protected from bankers who are obsessed with taking high risk gambles with other people’s money. I propose that banks are given a choice: they can do ordinary consumer business like current accounts, mortgages, business loans, savings, they can even make sensible low-risk investments and we will protect them and their customers’ money if things go wrong, but in return, we will regulate them like a hawk.

The alternative that some banks may prefer is to take the high-risk route, playing the markets to get big returns. But if they do this we will regulate them and keep them small so that they can’t put whole markets at risk. If things go wrong, we would let them fail.

… if anyone’s ever going to trust Britain’s banks again, those responsible for this crisis need to be brought to account. They may not be criminals, but they failed. The companies they ran had to crawl to the taxpayer for a multi-billion pound bailout, and in my book that’s failure. But what’s staggering is that none of them have been held to account for what they did.

When Barings Bank went belly-up in 1995, the Government banned 10 directors from working in any other boardroom. This time, when the whole banking system has been torn to pieces, not one person has been disqualified.

No wonder people have lost faith in a banking system in which the most basic standards of accountability have been forgotten. I believe we should disqualify these bankers right now, and have launched a petition at www.disqualifythem.org to get the Government to do it.

You can read the article in full HERE.

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One Comment

  • Andrew Duffield 19th Mar '09 - 1:57pm

    Dear Nick

    All we need is for the Bank of England to be sole issuer of sterling, lending to banks at base rate and ending private appropriation of such public wealth.

    The revenue raised should replace the taxes that rich corporations and individuals now avoid, without massive state regulation and costly policing.

    By removing barriers (mainly regulatory) to other organisations wishing to offer banking services, no bank would be “too big to fail” and state bailouts could be consigned to history.

    A Liberal banking system would automatically incentivise equity investment for capital returns (rather than rent-seeking, unearned usury) – and would do so without state interference.

    If you want a populist line that would really deliver “a return to old-style banking”, vastly more sustainable government finances and less risks for the public purse, try a campaign/petition for the re-nationalisation of sterling.

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