Financial sector reforms will be pushed through despite warnings, Cable insists

VINCE Cable yesterday told bankers that the UK government would press ahead with its reforms of the financial sector despite warnings from some institutions that implementing them could damage the economic recovery.

The Liberal Democrat Business Secretary argued that the uncertainty in the markets made it “all the more necessary” to make the banks safe and reform them.

On a visit to Edinburgh, Mr Cable also played down suggestions that Lib Dem and Conservative ministers were split on the timing of reform.

Some reports have claimed that Chancellor George Osborne wants to see the recommendations of the Independent Commission on Banking implemented over several years.

The Lib Dems want the reforms to ring-fence retail banks and their investment arms immediately. At Edinburgh University, Mr Cable said: “What we in government are agreed on is that when that report is published there will be a very clear signal to the banking industry to make sure it conforms.” He denied that he had been frustrated by the slowness of progress.

“There is a lot of common ground on the need to reform the banks and make them safe – to get away from the position where the government is effectively underwriting big global banks engaged in large scale investing operations.

“That is common ground. So I am not at all frustrated.”

TOM PETERKIN