Friday 23 March 2018

No broad support for Obama curbs on banks

Tough plan: Barack Obama. Photo: Getty Images
Tough plan: Barack Obama. Photo: Getty Images
Brendan Keenan

Brendan Keenan

US PRESIDENT Barack Obama's tough plan to limit the activities of banks is unlikely to get international support, a leading expert from the British financial industry said yesterday.

Andre Villeneuve, who is chairman of the City of London's International Regulatory Strategy Group and a member of the High Level Financial Services Group set up by British Chancellor Alistair Darling, said he did not think the plan would contribute to the global "level playing field" that the banking industry requires.

Describing the plan as a "bombshell", Mr Villeneuve said it had the merit of being clear, but he was not sure that it was addressing the right problems.

"The UK has a major interest in this proposal, because of the way they might affect US banking operations abroad and those of foreign banks in the US," he said. Mr Villeneuve said the banking industry, at least in Britain, appears to have been in denial after the crash and thought it could go back to business as usual.

"It under-estimated the profound public anger of people who are paying the social and economic price. Many other business have taken a bigger hit than the financial industry."

The industry must choose its priorities on regulation and other issues and engage in the debate. "Nobody is listening to arguments that the industry cannot afford it. It first has to re-establish its reputation with politicians and the public.

"It is dangerous for bankers to over-react to the pushback on bonuses. Pay matters. So does the repayment of taxpayers' losses," Mr Villeneuve said.

"But the problem for the City is how many safety belts can we handle? All the ideas being talked about would accumulate into huge costs. That would mean less credit and higher costs to the consumer," he said.

Irish Independent

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