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| Version 2 | Version 3 |
|---|---|
| Tories back US banking reform | Tories back US banking reform |
| (10 minutes later) | |
| Shadow chancellor George Osborne has told the BBC that if the Conservatives win the general election they would follow US plans to reform banks. | Shadow chancellor George Osborne has told the BBC that if the Conservatives win the general election they would follow US plans to reform banks. |
| Under the proposals outlined by President Barack Obama, US retail banks will face curbs on their riskier activities. | Under the proposals outlined by President Barack Obama, US retail banks will face curbs on their riskier activities. |
| Mr Osborne said he would want to see international agreement before implementing any change in the UK. | Mr Osborne said he would want to see international agreement before implementing any change in the UK. |
| The Treasury said it would consider the US bank reform plans "very carefully". | The Treasury said it would consider the US bank reform plans "very carefully". |
| 'Welcome move' | 'Welcome move' |
| BBC business editor Robert Peston said Mr Osborne's comments would "generate profound fear in the boardrooms of Barclays and Royal Bank of Scotland". | BBC business editor Robert Peston said Mr Osborne's comments would "generate profound fear in the boardrooms of Barclays and Royal Bank of Scotland". |
| Shares in both banks fell sharply on Tuesday, with Royal Bank of Scotland losing 7% - the biggest decline on the UK's main FTSE 100 share index. Barclays lost 5.9%. | Shares in both banks fell sharply on Tuesday, with Royal Bank of Scotland losing 7% - the biggest decline on the UK's main FTSE 100 share index. Barclays lost 5.9%. |
| Under President Obama's proposals, retail banks would be banned from using their own money in risky financial transactions. | Under President Obama's proposals, retail banks would be banned from using their own money in risky financial transactions. |
| This would prevent them from investing in hedge and private equity funds, or engaging in so-called proprietary trading - investing their own money as opposed to that of their customers. | This would prevent them from investing in hedge and private equity funds, or engaging in so-called proprietary trading - investing their own money as opposed to that of their customers. |
| "This is a welcome move by President Obama that accords very much with our thinking," said Mr Osborne. | "This is a welcome move by President Obama that accords very much with our thinking," said Mr Osborne. |
| "I have said consistently that we should look at separating retail banking from activities like large scale propriety trading - and that this was best done internationally." | "I have said consistently that we should look at separating retail banking from activities like large scale propriety trading - and that this was best done internationally." |
| Vince Cable, deputy leader of the Liberal Democrats called on the government to "get on with breaking up the banks". | |
| "It is absolutely essential that Britain is not left behind by the US," he said. | |
| "Britain is much more dependent on banks than America is and we are therefore much more vulnerable to banking crashes." |