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Nick Harvey MPStanding up for North Devon since 1992 |
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Cleaning up the Banks
July 12, 2012 12:54 PM
In North Devon Journal
In North Devon Journal
"It is about time the Government got to grips with excess profits of the banking system… [The banking industry] generated high levels of profit unrelated to the underlying risk." (Vince Cable, 2004)
When the Coalition Government came to office we were determined to clean up the banking system. So, one of our first acts in 2010 was to set up the Independent Commission on Banking, chaired by Sir John Vickers. His final report was received in September last year and has been debated in Parliament. The Government is now preparing a Banking Reform Bill, based on the Commission's recommendations. The main focus of the Bill is to safeguard against a repetition of the banking crash in 2008. Another Bill reforms the regulation of banks, returning some powers to the Bank of England and setting up a new Financial Conduct Authority. We are also increasing the taxes that banks must pay, including the permanent bank levy which raises £2.5bn every year.
Last week saw the banking industry hit by another scandal when it was revealed that Barclays had been manipulating LIBOR rates.
In response, the Coalition is taking swift action, including examining whether any changes in the criminal regime are needed, so that just as crimes on our streets are punished, crimes in the banking sector are punished too.
It was suggested that what was needed was a judge-led inquiry, such as the Leveson Inquiry that has questioned everyone from Rupert Murdoch to Tony Blair. This inquiry had to be led by a judge as it is investigating the behaviour of journalists, the police and politicians, including current government ministers. This set of circumstances simply does not apply in the much narrower issue of banking standards. A judge led inquiry would take longer and cost more than a Parliamentary committee. It would also either be delayed or have its scope curtailed as a result of ongoing criminal investigations into LIBOR.
However, as you may know, the House of Commons voted for a full Parliamentary inquiry into professional standards in the banking industry. I am glad that Labour has said they will take part in this inquiry and I very much hope that we will see a thorough, fearless and determined inquiry which will improve our banking system forever.
The Liberal Democrats want that inquiry to have extra powers on evidence gathering and more resources; especially we want the Inquiry to have legal counsel to rely on, such as a QC who would support Parliamentarians.
Finally, I want the individual bankers who acted against the law and the public interest to be held to account. They believed for too long that they could operate above and beyond the normal rules of business.. The Serious Fraud Office is looking at the case for criminal prosecutions and you can rest assured that my Liberal Democrat colleagues and I will ensure they have the resources necessary.