There were suggestions at the weekend that today’s banking report would not go far enough to please Vince Cable and his fellow Lib Dems. That is because Cable had previously called for a total separation of retail and casino banking – not merely internal ringfencing, as the report suggests.
But that is not true, according to Matthew Oakeshott, the Liberal Democrat peer and hammer of the banks. Lord Oakeshott has just given his seal of approval to the work done by the Vickers Commission on banking, declaring it an “excellent piece of work“.
The fact that Lord Oakeshott approves of the suggested remedies for making the banks safer and more competitive is significant: it means that the Lib Dems in the coalition are unlikely to try to toughen up the proposals in the coming months.
Instead the Lib Dems are going to focus their efforts on ensuring that George Osborne and the Treasury implement Vickers. Oakeshott, remember, was sacked (as a Lords Treasury spokesman) for criticising the Treasury’s alleged capitulation to the banks in its “Merlin” negotiations on bank pay and lending.
Oakeshott says he expects the banks to try to water down the Vickers proposals in the coming months, but he tells us today: “It’s like a carmaker complaining it costs too much to fit proper brakes to their cars. We can’t afford another crash.”
Jim Pickard
Kiran Stacey
