Mr John Redwood (Wokingham) (Con): If break-up and segregation may be necessary for a bank in a future crisis, why do the Government not understand that they may need those techniques to deal with the inherited, still very serious banking crisis that we are living through, which is preventing the financing of a full recovery? Will the Government look at what they can learn from their studies to sort out the problem of RBS today, which is our biggest obstacle to recovery?
The Financial Secretary to the Treasury (Greg Clark): My right hon. Friend makes a forceful point. The legislation is about the future. It is quite right that it should proceed with consideration and that we should not introduce things that might have unintended consequences without adequate consideration in this House. The Government are obviously the major shareholder in RBS. It is important that RBS should be returned as swiftly as possible to private hands. The current situation is far from ideal, and I know that my right hon. Friend shares our ambition on that.
February 5, 2013
It’s alarming that debate seems to have been diverted into what kind of sprinkler system to install in future, without giving any thought to extinguishing the fire still burning in the building right now!
The ‘segregation’, though, seems a retrograde step at best: apparently, we are supposed to model our banks in future along the lines of Northern Rock and Lehman Brothers, because the economics book so many politicians are working from says diversification is bad and makes businesses less resilient.
Surely what we really need is a sensible look at market share and resilience? We heard that apparently RBS Group had been allowed – arguably, encouraged – to become so big they were a threat to our entire national economy. We wouldn’t all starve if McDonalds or Sainsburys collapsed; the recent failures of HMV and Blockbuster are problems for a few thousand employees, not for the millions of taxpayers in the nation as a whole – so why was RBS such a mess?
Segregation misses the point completely. A company controlling a third of the high-street banking business is a major point of vulnerability in itself; if anything, having other business activities as well would mitigate, not exacerbate, this (even in a worst-case liquidation of a failed banking operation, they could sell off the non-banking division to mitigate the losses on the banking side).
February 6, 2013
Looks like RBS is going to get hammered for the LIBOR scandal now, my poor shares are up and down like a tarts drawers.
Loads of money men taking their profits over the past few days in advance of this news has further hammered the share price..
Off topic, the Fisheries policy is being debated in the EU with much heralded comment on the discard policy revision. The main point for us that the stocks are pathetic and we have our poor quotas being sold to foreign companies who have set up a company in the UK to be legal. Then the disgrace of “slipper skippers” who have sold off their quotas to these companies and never go to sea so the profits are scammed by foreign boat owners.
The fish are breeding now at ever decreasing size as nature tries desperately to keep up with our greed and carelessness.
The fisheries policy would be one of the things to get returned to Brussels with a no thanks we have had enough and we should revert to our old stance re build real fisheries in this island country. Get the RN to defend our waters and stop the rest from hoovering up our fish.