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We need smaller and regional banks We need smaller and regional banks
(4 months later)
Cameron's plan (PM raises prospect of 1980s-style sale of RBS, 16 May), losing the taxpayer some £24bn, exposes the government's priorities. He insists on cutting benefits by £18bn and expenditure on public services by another £81bn, with all the hardship that causes, yet for ideological reasons gratuitously empties the public coffers of £24bn.Cameron's plan (PM raises prospect of 1980s-style sale of RBS, 16 May), losing the taxpayer some £24bn, exposes the government's priorities. He insists on cutting benefits by £18bn and expenditure on public services by another £81bn, with all the hardship that causes, yet for ideological reasons gratuitously empties the public coffers of £24bn.
Why sell RBS at all? Private-sector dominance of the banks led to the crash of 2008-09 – and almost no safeguards have yet been put in place to prevent a recurrence. Nor are the Basel III provisions in 2019 or the proposed Vickers commission's Chinese walls, flawed by the risk of regulatory arbitrage, an adequate response. Banks should support British industry and services, not indulge the current predilection for property, overseas speculation, tax avoidance and derivatives. Only 8% of current bank lending goes into productive investment, which is a main reason why Britain's traded goods last year showed a deficit of £106bn, 7.3% of GDP.Why sell RBS at all? Private-sector dominance of the banks led to the crash of 2008-09 – and almost no safeguards have yet been put in place to prevent a recurrence. Nor are the Basel III provisions in 2019 or the proposed Vickers commission's Chinese walls, flawed by the risk of regulatory arbitrage, an adequate response. Banks should support British industry and services, not indulge the current predilection for property, overseas speculation, tax avoidance and derivatives. Only 8% of current bank lending goes into productive investment, which is a main reason why Britain's traded goods last year showed a deficit of £106bn, 7.3% of GDP.
Too much economic power is concentrated in the Big Five banks, holding some 85% of the public's money, while the Cruikshank commission recommendations remain unimplemented. Total gross lending of the banking sector reached £7tn, five times GDP and 10 times total government spending, but the catalogue of malfeasance witnessed in the last decade of market-rigging, money laundering and product mis-selling shows clearly that banks of this size cannot be trusted with that power.Too much economic power is concentrated in the Big Five banks, holding some 85% of the public's money, while the Cruikshank commission recommendations remain unimplemented. Total gross lending of the banking sector reached £7tn, five times GDP and 10 times total government spending, but the catalogue of malfeasance witnessed in the last decade of market-rigging, money laundering and product mis-selling shows clearly that banks of this size cannot be trusted with that power.
Britain needs smaller, specialist banks which would serve the rebalancing of the economy – regional banks like those that support the German Mittelstand, as well as banks focused on infrastructure, a low-carbon economy, small businesses, science and innovation etc.
Michael Meacher MP
Lab, Oldham West and Royton		Britain needs smaller, specialist banks which would serve the rebalancing of the economy – regional banks like those that support the German Mittelstand, as well as banks focused on infrastructure, a low-carbon economy, small businesses, science and innovation etc.
Michael Meacher MP
Lab, Oldham West and Royton
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