Monday 14 October 2019

Nicholas Leonard: Tories on top as Cameron has banks in his sights

Nicholas Leonard

British Prime Minister David Cameron is defying intense pressure from top bankers in the City of London and pushing ahead with the biggest revolution in the financial services industry for a generation.

Mr Cameron has a reputation for favouring financiers but many of them are furious that he has decided to try to avoid crises in future by making the banks separate the high-return but higher-risk business of investment from the more routine activity of simply taking in money from some customers and lending it on to others.

The details will be given by Chancellor George Osborne in the Commons today.

There is nothing very new about the new legislation. It is pretty well identical to what the US did back in 1933 when it faced a financial crisis so severe that all the banks in the country had to close for almost a week and more than 4,000 of them went bust.

The clampdown in Britain comes just 10 days after Mr Cameron's veto of the EU treaty in Brussels, an event which has already taken on the status of legend among his eurosceptic backbenchers.

Their enthusiasm for his gesture, dismissed by Business Minister Vince Cable yesterday as "largely political", has been fuelled by the vitriolic reaction from France, with President Nicolas Sarkozy ridiculing Mr Cameron as a "stubborn kid" and the head of the French central bank, Christian Noyer, launching an unprecedented attack on the relative solvency of the two countries' banking systems.

Even the deputy prime minister, Nick Clegg, was forced to admit that the French comments were "simply unacceptable".

It is clear now that the consequences of the veto are going to be much less damaging to the rapport between Britain and the other 26 members of the EU than Mr Clegg originally feared and also that the use of the simple word 'No' by Mr Cameron was the outstanding political coup of the year.

The most reliable opinion poll company, ICM, reported yesterday that, with the support of 40pc of voters, the Conservatives are now a remarkable six points ahead of Labour.

Considering the state of the economy, the sharp rise in unemployment and the bleak prospects for 2012, the relative popularity of the Conservatives is surprising. But the simple fact is that Mr Cameron mostly manages to look and sound like a self-confident leader, while Labour leader Ed Miliband seems to be thumbing his way through a paperback on how to win votes and influence people.

As well as re-organising the faulty banking sector, Mr Cameron is keen to do some social engineering as well. He has set aside the equivalent of almost €600m for active intervention in as many as 120,000 dysfunctional families.

Mr Cameron has also ordered a copy of the King James translation of the bible to be sent to every school in Britain.

He said last week: "Whether you look at the riots last summer, the financial crash and the expenses scandal or the on-going terrorist threat from Islamist extremists around the world, one thing is clear, moral neutrality or passive tolerance just isn't going to cut it any more."

Irish Independent

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