http://www.bbc.co.uk/news/business-12261364


So that will be another aspiration. I wonder how quickly this will be abandoned.


AMazing how short politicians memory is. It was the deregulation that the last Conservative government that allowed the banks to make a mess of it all. New Labour just carried on doing what the Tories and bankers wanted. There were few comments from the Conservatives prior to the crash.

I was listening to an interview on the Radio this morning and it got about 10 minutes in before I realised it was Clegg rather than Cameron. Not only were the policies he was espousing surprisingly non-liberal, they really do sound almost exactly alike.

Jon

Yes he has dragged the Liberal Party so far to the right no wonder its party base is collapsing.

The last government had plenty of opportunities to sort out the regulation of the banking sector. Thirteen years of doing sweet FA about it. Thirteen years of wasted opportunities but looked the other way.
The deregulation by the previous conservative government may have help the banks make a mess but if your in power that long you can't keep on using the excuse that it was the them not us.

I am not excusing New Labour at all. The issue during Labours place in power was for more deregulation. Most economists of the time were arguing for that. As were bankers business leaders and the Conservatives. The consensus was for deregulation, not regulation of any kind. So Labour were trying to be business friendly. Yes the set up of bank regulation, in three separate bodies which meant that it was ineffective did not help, but the Conservatives regulation regime would have been change after pressure from the banks and business anyway. If Labour had left the regulations alone we would still have had the financial crisis and bank bailouts because of the other things that the banks were doing. They bought Mortgage Backed Securities which created huge losses for them, they speculated in derivatives which nearly bankrupted Barclays, and were bailed out by the bailout of AIG by the US government. All of these new "products" or "innovations" destroyed the banking system and the only regulation that would have stopped this was repealed by Thatcher. Most economists think that we our economy is recovering. I do not. While GDP might be higher it is very weak. After a recession initial growth is considerably higher than it was, even with the stimulus.

The problem is is that its easy to say and very hard to do esp in the times of a recession

Bank can and do move their “Head Office” to places that are more favourable (Tax / Regulatory etc) wise

You are unable just to kick them out at this time as the loss of the banking sector would
- Hit the tax take we get (and it’s still substantial)
- Dry up what little mortgage / small business lending there is

It is estimated that the Banking sector contribute around 10% of the total UK tax take so if we lost even a small percentage of that it would mean greater taxes or greater cuts
source

In a boom you can be harder on them as they will weigh up the costs of the regulation against the profits – in a recession the profits may not be that good so it’s cheaper to move

The tax take was 30% prior to the crash. It was this drop in tax which makes up the bulk of the deficit.

I like the idea of building societies. They are much less risky.

Same here. I think longer term the banks should be banned from the residential property market that way they cannot over inflate the property market. That was what happened till the 80's.

There is / was talk of making Northern Rock a mutual Co again when its sold off from public ownership

Yes that would be good, but I cant see this government doing that.

Also they will raise more money selling it off to another Bank / someone who wants to get into the UK banking market.

But I bet it ends up in the hands of one of the big banks. If it goes to a foreign bank it will mean problems in future. Not immediately but as soon as there is another crisis, which will be soon enough without reform which this coalition will talk about but will not carry out.