Darling kowtows to finance sector . . . bank on it

Yesterday, the Chancellor Alistair Darling set out his proposals for banking reform and regulation in a White Paper. You can read his Statement to the House of Commmons here.

So what did Darling propose? The Guardian states that he "ruled out caps on bankers' pay or breaking up the biggest City institutions".

The Telegraph reports that "many experts expressed scepticism that the new body would achieve much more than the existing standing committee".

The Financial Times quotes an anonymous 'big bank', which "described the planned changes to the Financial Services Compensation Scheme as 'a massive failure of policymaking'. 'We still need to be convinced of the benefits of a pre-funded compensation scheme,' it said. 'A major bank failure will always need government intervention in any case'."

This makes our response all the more pertinent, John McDonnell, LEAP Chair, said: "There is nothing new, it is just a timid re-branding of little more than the existing system".

"Banking is a fundamental public service which should be under public control. The least the Chancellor could have done would have been to split speculative banking from retail banking, and to bring retail banking under mutualised public control".

Unsurprisingly, the British Bankers' Association welcomed the paper. Angela Knight, BBA chief executive, said: "Banking is a global business and reform needs to be thoughtfully handled so moves in the UK dovetail with those overseas, ensuring the UK sector remains competitive. Otherwise business could move again."

Yes, we should be thankful it was the UK that the banking sector nearly bankrupted, and has indebted for a generation or more, and not somewhere else . . .