He’s Brown and Gordon
Mr Brown was responding to Mr King’s fiercest attack yet on big banking in a speech he gave in Edinburgh last night. Mr King indicated the country’s high street banks should be separated from their risky investment banking arms. ““It’s clear King’s not happy with where we are now,” Colin Ellis, an economist at Daiwa Securities told Bloomberg. “He said the regulatory structure was inadequate, and coming from the governor of the Bank of England that’s as damming as it could be.” The regulation of the financial system is again racing up the political agenda as banks on both sides of the Atlantic are poised to hand out billions of pounds in bonuses at the end of the year. Mr King told Scottish business leaders yesterday that it was insufficient to expect that in the future tighter regulations alone would be enough to prevent banks from generating financial crises. Governments in the UK and US have tacitly ruled out splitting up the biggest banks and opted instead to scrutinise them more actively. In a speech in Edinburgh, the Governor said “It is in our collective interest to reduce the dependence of so many households and businesses on so few institutions that engage in so many risky activities. The case for a serious review of how the banking industry is structured and regulated is strong.” George Osborne, the shadow chancellor, described Mr King’s analysis as “powerful and persuasive”.
