Posts Tagged ‘City’

Osborne’s caved in to City vested interests and Labour’s let him get away with it

23/10/2015, 05:10:34 PM

by Samuel Dale

Without the shackles of the Liberal Democrats, George Osborne has been set free in his relationship with the City of London. In Mansion House speech in June, he called for a “new settlement” with banks.

The new settlement effectively means less regulation, less supervision and less tax. Big banks and hedge funds have received a rush of goodies from the Chancellor and we have not heard a peep from the Labour front bench about any of it. Not a single moment of pressure.

Here are five key ways Osborne has appeased banks since May:

  1. Sacking FCA chief executive Martin Wheatley

Over the summer Osborne sacked tough-talking Financial Conduct Authority chief executive Martin Wheatley for being too harsh on banks.

He is now on the hunt for someone who will be less aggressive and more agreeable to bank chiefs. This is a major, under-appreciated shift. Banks now know they can just call up Number 11, complain about the FCA and the chief regulator will be out on his ear. The next chief exec will know if they talk too tough then they will lose their job.

  1. Reforming the bank levy

Osborne has shifted the burden of the bank levy from large banks with global balance sheets such as HSBC and Standard Chartered, who can easily get up and leave, and on to smaller banks and building societies, who can’t leave.

From next April, smaller banks will pay more tax, larger banks will pay less, This stifles new entrants and reduces competition and yet the Treasury is standing firm.

  1. Scrapping bank regulation

The parliamentary commission on banking standards was set up in the wake of the Libor rigging scandal in 2013 to fix banking culture. It was led by free market Tory MP Andrew Tyrie and Nigel Lawson was a key member. No socialist firebrands in sight.


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Sharia law for the City of London

16/02/2011, 03:30:59 PM

by James Watkins

When it comes to the banks, Labour often seems to tie itself in knots. Without the square mile, the finances of the country are seen to be on shaky ground. At the same time, governments around the world which took it easy on the bankers contributed to the financial morass we are in now.

For many in Labour, there seems to be no centre-left vision or school of thought other than to accept the model of banking we have now – while maybe taking another look at regulation. But as recent events demonstrate, even this seemingly pragmatic approach is a risk too far and is one which led Gordon Brown to call for “markets with morals”.

As for the government, with Vince Cable seemingly out of the picture in pushing for fairer bank terms to small businesses, all we now have left is a threadbare deal with the banks from chancellor George Osborne. This has the non-binding target of £190 billion for lending being a gross amount, not net. So it is very possible that, as businesses repay their loans and others have credit withdrawn, the gross target is met, but net lending declines. (more…)

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