Belfast Telegraph

Monday 22 September 2014

No rift over banking, says Cable

Liberal Democrat Cabinet minister Vince Cable has played down reports of a rift over banking reforms

Liberal Democrat Cabinet minister Vince Cable has played down reports of a rift with Conservative coalition colleagues over banking reform.

The Business Secretary said he did not "think there is a difference" within the Government over the likely proposed ring-fencing of banks' retail and investment arms.

The Independent Commission on Banking is widely expected to propose the reform later this month, but reports have suggested that Chancellor George Osborne and Prime Minister David Cameron are sympathetic to lenders' claims that they will need several years to make the change.

Senior figures in the business and banking community have warned against imposing the reform, particularly given the fragile state of European economies.

CBI director general John Cridland said pushing ahead with the measure at the current time would be "barking mad" and British Bankers' Association chief executive Angela Knight has warned imposing the measures on lenders risked denting confidence and cutting the supply of credit to the economy.

However Mr Cable has dismissed their concerns about the state of the economy as "disingenuous in the extreme" and said continuing anxieties about the health of banks showed the need for reform.

The Prime Minister said no decisions would be made until the publication of Sir John Vickers' commission's report on September 12.

He added: "I think the key thing we want from banks is lending into the economy so we can support growth and jobs, and we need to make sure we are not taking risks that put jobs at risk."

Deputy Prime Minister Nick Clegg said arguments about the details of the proposals could wait.

He said: "Let us just establish the principle, and the principle is that we have to reform our banking system. We have to reform it because we cannot ever again allow the banking system to blow up in our face in the way that it did before."

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