Thursday, 9 April 2009

Separating retail and investment banking

If Australian bankers are wondering what penalty could be applied to them by a government angered at their refusal to pass on cuts in official interest rates they should study the speech yesterday by the British Conservative Party's shadow Chancellor of the Exchequer. George Osborne hinted yesterday that a Conservative Government would break up Britain's nationalised banks and would also consider whether to block other lenders from becoming too big. In a speech at the Royal Society of Arts, Mr Osborne said: “We need to think deeply about whether we can sustain banks that are not only too big to fail, but potentially too big to bail.” He added: “We should look at whether Britain in fact needs smaller banks. For it would be a bitter irony if we came out of this crisis with a banking system that was even more concentrated and even riskier than the one we had before it.” The London Times also reports this morning that the Bank of England is examining whether Britain's biggest banks should formally separate their investment banking and retail banking operations
Post a Comment