Britain’s opposition Labour leader Ed Miliband vowed to break-up the country’s biggest banks if his party came to power at the next general election, in an interview with a Sunday newspaper.
Miliband, whose party enjoys a 10-point lead in the latest polls, told the Observer newspaper that he would split the banks’ “casino” investment operations from their high-street arms.
“Either they can do it themselves, which frankly is not what has happened over the past year, or the next Labour government will, by law, break up retail and investment banks,” he said.
‘PLAYING THE MARKET’
Speaking ahead of the party’s annual conference, set to open in Manchester yesterday, Miliband urged banks to focus less on “playing the international money markets” and more on lending to small businesses.
A government-commissioned report led by John Vickers advocated a ringfence between banks’ operations, but Bank of England chief Mervyn King last month warned that bank lobbying had “watered down” proposed reforms.
“The banks and the government can change direction and say they are going to implement the spirit and principle of Vickers to the full,” the Labour leader said.
“That means the hard ringfence between retail and investment banking. We need real separation, real culture change. Or we will legislate,” he added.
SHARPER FOCUS
Miliband on Saturday used a pre-conference question-and-answer session to outline his party’s support for younger people.
He called for a sharper focus on vocational training and gave his backing for the voting age to be brought down to 16.
However, he admitted that his party would not reverse many public spending cuts implemented by the current coalition government. Despite the party’s positive poll ratings, Miliband’s personal ratings remain unimpressive.
FINANCIAL STRENGTH
Meanwhile, banks can improve their financial strength and still lend, Andrew Bailey, head of prudential regulation at the UK’s Financial Services Authority (FSA), said in an opinion piece published in the Sunday Times.
Bailey said banks should still be able to lend if they take steps to remove bad loans and non-core assets from their balance sheets. He said banks might need to issue new shares to investors to raise capital.
“Banks need to use every opportunity to increase their capital while being rigorous in reducing any remaining uncertainty over the valuation of their assets,” Bailey said.
RESILIENT
Bailey is a member of the Bank of England’s Financial Policy Committee, which he said is pursuing the two goals of making banks more resilient and increasing credit available to the economy.
The FSA has changed guidance given to banks on capital needs over the past two months, Bailey said.
“An increase in lending would in itself offset the risk from reducing capital requirements on new lending,” he said.
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Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day