Labour to push harder on financial regulation

4:45 am - July 13th 2013

by Newswire    

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The shadow chancellor Ed Balls has unveiled a series of amendments to the upcoming Banking Reform Bill, designed to push harder on financial regulation.

His team confirmed to Liberal Conspiracy that a future Labour government would pursue these amendements if the current government did not put them in place.

A summary of Labour’s amendments can be found below and a full list of amendments tabled can be found here.


REVIEWS OF THE RING-FENCING RULES – based on an amendment drawn up by the Parliamentary Commission but with reviews of the ring-fence brought forward to every two rather than every five years.

FULL SEPARATION RESERVE POWER – a full separation reserve power to split banks into retail and investment arms, as has been repeatedly called for by Ed Miliband and Ed Balls as well as the Parliamentary Commission.

PROFESSIONAL STANDARDS – this is similar to the amendment tabled by Labour at Committee Stage, which called for the licensing of bankers, but it has been updated to reflect the recommendations made in the final report by the Parliamentary Commission.

DUTY OF CARE – this was also tabled at Committee Stage and would impose on ring-fenced banks a duty to operate prudently and to safeguard deposits, and a duty of care to customers across all financial services.

REMUNERATION – the regulator should have the power to require elements of remuneration to be deferred for up to 10 years. This was also tabled by Labour at Committee Stage and has been re-tabled in light of the fact the Parliamentary Commission took a very similar view in its final report.

REVIEW INTO SETTING UP A FINANCIAL SERVICES CRIME UNIT in the SFO – this is similar to a Clause tabled by Labour at Committee Stage and follows one of the key recommendations made by Ed Miliband in his speech on banking last year.

WHISTLEBLOWER PROTECTIONS – this would mean a worker cannot be dismissed if they blow the whistle on misconduct. If they are, they can claim unfair dismissal – and they will be protected by law as long as certain criteria are met.

BANK ACCOUNT PORTABILITY – this aims to boost competition by making the Treasury report on how to make it easier to switch bank accounts. It would also cover possible changes in the law to facilitate switching and give the regulator powers to enforce any account switching scheme.

REVIEW INTO COMPETITIVENESS – Competition and Markets Authority to immediately begin a full market study of competition in the retail and SME banking sectors, as recommended by the Parliamentary Commission.

LEVERAGE RATIO TARGET – the Treasury would set a target for the leverage ratio which would be supervised by the FPC. The amendment also reflects the need to ensure banks do not shrink lending.

SALE OF STATE-OWNED BANKING ASSETS – ensure that before the privatisation of RBS and Lloyds the Treasury publishes a report into how the best interests of the taxpayer will be protected.

RECKLESS MISCONDUCT IN THE MANAGEMENT OF A BANK – following the recommendation by the Parliamentary Commission, the Treasury would bring forward proposals to cover a new offence of “reckless misconduct”.

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Reader comments

1. Baton Rouge

The horse has bolted. The finance `industry’ is thoroughly bankrupt. It owes its speculating creditors trillions and it is taking the state, the currency and the real economy down with it. New Labour are such total arse hats. Let’s recreate Brown’s dodgy growth theory based on private financiers creating counterfeit value so we can rob the planet? You can only do that once and trying to reassure everybody that this time it will be different is pure fantasy even if it could happen which it can’t.

2. Martin Jamerson

Baton Rouge @ 1

And it puts a shiver right down your spine when you realize that the Conservatives wanted even less regulations on the banks and financial institutions.

3. Baton Rouge

Of course they started it but I’m not sure how the Tories could have delivered much less given Mandy’s Maoist advice to the City when New Labour came to power: `get rich and pay your taxes.’ In any case New Labour’s proposals for a much more robust regulatory framework are meaningless because the private finance sector is bankrupt and it would take the destruction of the state balance sheet, the complete debasement of the currency and an end to the real economy to `un-bankrupt’ it which will not happen however hard the Coalition tries or how hard they screw the poor, sick, young, old and disabled or just the general working population.

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