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Richmond upon Thames Liberal Democrats:Covering the constituencies of Twickenham and Richmond Park |
Cameron at odds with Cable over banking reforms
August 31, 2011 6:40 PM
• [Aug 22] Hélène Mulholland and Ben Quinn write: DAVID Cameron has warned against "taking risks that put jobs at risk" as he highlighted the crucial role banks need to play to help economic growth. The prime minister made his comments after the Liberal Democrat business secretary, Vince Cable, lashed out at the big British banks whom he accused of being "disingenuous in the extreme" in their claim that sweeping banking reforms could damage the economic recovery . .
However, Cable said the fact that there were still fears about the collapse of big financial institutions was "all the more reason for grappling with this issue". The Lib Dem minister used an interview with the Times to hit out at banks using the economic turmoil in Europe to try to derail reform of the financial sector, amid fears the changes could end up being shelved until after the next general election . .
Cable told the Times: "It is disingenuous in the extreme to use the current context to argue against reform. Banks are in a way trying to create a panic around something which they know has got to happen." The Lib Dem business secretary has long favoured the separation of retail and investment banking. He added: "The governor of the Bank of England and many other people have been arguing that we have to deal with the 'too-big-to-fail' problem. We can't have big global banks with balance sheets bigger than British GDP underwritten by the taxpayer; this can't go on and it has got to be dealt with." Cable acknowledged that any changes would require legislation and would not take place immediately.
. . John Thurso, a fellow Lib Dem MP who sits on the Commons Treasury committee, told BBC Radio 4's Today programme that banking reform was "absolutely central" for the economy and said the Lib Dems were "absolutely right to keep pushing to make sure it doesn't go away" . .
Cable told the Times he did not expect another 2008-style meltdown in the banking sector, but acknowledged difficulties could still lie ahead for the British economy. "To my mind, the greater worry is not a massive financial crisis again but it is a general slowing down of western economies, with all the problems that presents for employment and long-term dynamism," said Cable . .
• Cameron at odds with Cable over banking reforms [Guardian Aug 31]
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