All party consensus: break up the banks |

Wednesday 21st October 2009 | 15:12

All party consensus: break up the banks

There is now a cross-party insider consensus that Meryvn King was right in calling for major reform of the banking system

A majority of MPs, journalists and other political insiders believe that separating the retail functions of banks from their investment banking activities would be a good move, according to the latest PoliticsHome Phi100 survey.

The Governor of the Bank of England’s forceful speech yesterday was highly critical of large banks and the government, and repeated his desire for the splitting of major banks.

69% supported a forced separation as proposed by King, with just 17% opposing it.

The idea also gained the support of a majority across all party lines.

The Phi100 is comprised of prominent journalists, MPs, peers, strategists and think tank leaders, and provides a daily insight into sentiment at the heart of British politics.

"Urgently needed"

A political journalist said, “The public can handle supporting commercial side of banking, but not propping up the riskier investment side.”

A left-aligned think tank leader said, “This is urgently needed – it's far more important than curbing bonuses.”

“Yes, but only if a new growth model for the UK economy is put in place”, said a non-aligned think tank leader. “There's a danger that all of this highly sensible and prudential stuff will leave the UK stuck without a means to grow. Risk, sadly, has been a precondition for growth - do away with the risk and we may do away with the growth too!”

A Conservative MP was less enthusiastic. “Glass-Steagall works in 1933 – it is rather harder in 2009”, he said.

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