Bankers and ministers come face to face with regulation on agenda

BANKING bosses are today set to tackle coalition ministers for the first time over industry regulation, threats to break up the banks and proposed taxes on financial institutions.

Leaders of the UK's major banks, including Royal Bank of Scotland chief executive Stephen Hester, Lloyds Banking Group head Eric Daniels and Barclay's chief executive John Varley, will meet Chancellor George Osborne and Business Secretary Vince Cable in London.

The meeting is believed to be the first since the coalition government came into power in May. Former chancellor Alastair Darling held regular sessions with banking heads.

Mark Hoban and Lord Sassoon, the financial and commercial secretaries to the Treasury respectively, will also attend the meeting. Proposed reform of the industry will be on the agenda, and the plan to impose additional levies on banks. The group will also discuss the role of the independent banking commission set up to decide on the possible break up of the banks into retail and investment arms, as well as ways of increasing lending to businesses.

"They will be looking at the full picture," said a source. "Everything from the economy to regulation issues is likely to be discussed."

A 2.5 billion levy on the balance sheets of large banks is currently under consultation, while Hoban is behind a proposed "financial activities tax", which would be based on profits and pay levels at large banks. The tax, however, would only be imposed if other G20 countries agree to implement a similar levy.