Timing of UK banking reforms 'barking mad', says business lobby group
Darkening clouds over the UK economy mean the British government would be "barking mad" to press ahead with proposals to reform the banking industry, the director general of the CBI business lobby group said today.
Speaking before next month's report by the Independent Commission on Banking (ICB) on how to increase stability and competition in UK banking, John Cridland said "unilateral" changes to regulation could threaten the fragile recovery.
His comments, reported in the Financial Times, come a day after Angela Knight, the chief executive of the British Bankers Association (BBA), said plans to reform the sector should be put on hold until the economy has recovered and taxpayers have been repaid for bailing out the banks.
It is expected the ICB will recommend ring-fencing banks' retail operations from their investment banking arms, although it will be up to Chancellor George Osborne to decide whether and at what pace to implement any reforms.
Mr Cridland said: "Taking action at this moment - this moment of growth peril, which weakens the ability of banks in Britain to provide the finance that businesses need to grow - is just to me barking mad."
He added that a perceived need for action after banks were bailed out in 2008 was driving the scale and pace of reform.
Mr Cridland said: "I get a sense that there's a little bit of 'we'll do this because of political reasons'.
"We don't want to force some of our remaining world class British companies to shift away from a focus on the UK because the rules have been set unilaterally in the UK. There's an own goal here about to be scored if we get this wrong."
