CHANCELLOR George Osborne’s bank reforms risk putting the UK economy into a “straitjacket”, according to lawyers south of the Border.
Desmond Hudson, chief executive of the Law Society of England and Wales, warned ministers that the banking reform bill could harm businesses, consumers and the UK’s reputation as a financial centre. Plans for a ring-fence around retail banks to separate them from riskier investment banking could create “instability in the banking system”, he said.
Hudson added: “When we need Britain’s banks to be lending to support growth, their best management brains will be adapting their business practices to the latest regulations. We’ve no desire to return to the excesses of the past – of red-braces-wearing bankers sprinting from Porsche to Ferrari dealerships – but we are interested in protecting a healthy banking sector, which supports other industries and exports.”
His comments came as Tory MP Andrew Tyrie’s Parliamentary Commission on Banking Standards published its second report on the bank reform bill, which called for more time to scrutinise the proposed legislation, a demand echoed by the Law Society.