Miliband unveils vision for banking
Published 08/07/2012 | 10:52
The row over ethics in the banking sector rages on as Labour leader Ed Miliband unveiled a radical vision for the industry in the wake of the Libor-fixing scandal.
As the fierce debate over banking culture raged on in Westminster, pressure continued to build on former Barclays boss Bob Diamond to waive at least part of a reported £17 million golden parachute pay deal.
Meanwhile, Barclays, which was fined £290 million by UK and US regulators for manipulating the key interbank lending rate, is reportedly considering spinning off its controversial investment banking arm Barclays Capital.
The developments came after the Serious Fraud Office on Friday launched a criminal investigation into alleged Libor-rigging at Barclays and the wider industry.
Speaking to the Mail on Sunday, Mr Miliband said he would like to see Britain's top five high street banks broken up and forced to sell up to 1,000 branches to pave the way for two new privately run challenger banks to bolster competition in the sector.
"We need a revolution in British banking," he said.
Lloyds Banking Group is already selling off more than 600 branches, with Co-operative Bank currently in exclusive talks to form what would amount to one of the challenger banks included in Mr Miliband's overhaul.
The Opposition leader also wants a new code of conduct for the banks to follow, which would be supervised by an organisation similar to the British Medical Association.
In addition, Mr Miliband would like to see a specialist banking unit set up with the Serious Fraud Office to tackle the "weak and fragmented" approach to fraud investigations.
Backing Mr Miliband's proposals, shadow chancellor Ed Balls told BBC1's Andrew Marr Show that the banking sector needed a "root and branch review" and said the Government was "dragging their feet".