Osborne backs bank break-up
Banks will be forced to separate their retail and investment arms if they fail to follow new ringfencing rules, George Osborne announced today. In a speech
in Bournemouth, Mr Osborne said the Bank of England would become the "super cop" of the financial services sector.
The Chancellor said the Government would never again be expected to bail out failing financial institutions.
Mr Osborne also set out sweeping plans to allow customers to switch their bank accounts to rival firms within a week.
Speaking in the Commons this afternoon, Financial Secretary to the Treasury Greg Clark said the reforms were "historic" but Shadow Financial Secretary to the Treasury Chris Leslie dismissed them as "half-hearted".
Mr Leslie told MPs: "What is it that the Chancellor has said at his seaside speech today? He's fudged the tough stance recommended by the Vickers Report and he's stopped short on the back strop powers and legislation for the leverage ratio envisaged by the parliamentary commission on banking standards."
The head of the British Bankers Association has also attacked the plans, warning they will damage investment.
"It is undoubtedly good politics, but it’s bad economics.," Anthony Browne told BBC 5live. "It’s yet another measure that makes it more difficult for businesses to raise money, which is what we need at this time in the economic cycle."