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Rivals bank plans 'timid' - Cable Rivals' bank plans 'timid': Cable
(about 19 hours later)
Only the Liberal Democrats have the "vision" required to restructure the banking system, Vince Cable will argue. Only the Liberal Democrats have the "vision" required to restructure the banking system, Vince Cable has argued.
The party's Treasury spokesman will say he first urged banks to be broken up at the peak of the 2008 financial crisis, a stance now backed by President Obama. The party's Treasury spokesman said he first urged banks to be broken up at the peak of the 2008 financial crisis, a stance now backed by President Obama.
Legislation is needed to split banks' deposit and lending businesses from their risky trading arms, he will say.
Both Labour and the Conservatives have warned of the risks of the UK embarking on "unilateral" reforms.Both Labour and the Conservatives have warned of the risks of the UK embarking on "unilateral" reforms.
Gordon Brown has insisted banks cannot be allowed to return to the "bad old ways" of bonus-driven speculation.
The prime minister's comments, made in his monthly press conference, came as City minister Lord Myners hosted a meeting of policymakers in London looking at how to restructure the industry to ensure a future banking crisis does not trigger a global recession.
'No ducking''No ducking'
But in a speech to the think tank Demos, Mr Cable will argue a radical overhaul cannot be "ducked" any longer if far-reaching changes to the British economy needed to secure future growth are to happen. In a speech to the think tank Demos, Mr Cable argued a radical overhaul could not be "ducked" any longer if the far-reaching changes to the British economy that are needed to secure future growth were to happen.
He will identify bank reform as one of the "pillars" of the party's economic policy for the election, alongside a credible deficit reduction plan, building a sustained recovery and making the tax system fairer. He identified bank reform as one of the "pillars" of the party's economic policy for the election, alongside a credible deficit reduction plan, building a sustained recovery and making the tax system fairer.
While both the main parties had "studiously avoided" the issue until recently, he will say that the Lib Dems are committed to creating a more stable, competitive and "socially productive" banking system. I see, at present, no evidence that the government or the Conservatives have any vision of banking beyond the immediate crisis Vince Cable, Lib Dem Treasury spokesman class="" href="/2/hi/uk_news/politics/8478251.stm">Brown rejects Tory deficit pressure
He will call for a "version" of the Glass Steagall Act - the Depression-era US law which separated retail and investment banking activities until its abolition in the 1990s - to be passed in the UK. While both the main parties had "studiously avoided" the issue until recently, he said that the Lib Dems were committed to creating a more stable, competitive and "socially productive" banking system.
He will also reiterate the need for banks underwritten by the taxpayer to contribute to the cost of state guarantees through a tax on their profits. He called for a "version" of the Glass Steagall Act - the Depression-era US law which separated retail and investment banking activities until its abolition in the 1990s - to be passed in the UK.
I see, at present, no evidence that the government or the Conservatives have any vision of banking beyond the immediate crisis Vince Cable, Lib Dem Treasury spokesman He also reiterated the need for banks underwritten by the taxpayer to contribute to the cost of state guarantees through a tax on their profits.
"Now that President Obama has taken on the issue of breaking up the banks on his side of the pond, it is time we do the same in the UK," he will say. "Now that President Obama has taken on the issue of breaking up the banks on his side of the pond, it is time we do the same in the UK.
"I see, at present, no evidence that the government or the Conservatives have any vision of banking beyond the immediate crisis.""I see, at present, no evidence that the government or the Conservatives have any vision of banking beyond the immediate crisis."
Mr Obama's proposals, which need congressional approval, would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund.Mr Obama's proposals, which need congressional approval, would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund.
They would also bar institutions from proprietary trading - investing to make a profit for themselves rather than on behalf of customers.They would also bar institutions from proprietary trading - investing to make a profit for themselves rather than on behalf of customers.
While stressing their support for the underlying principles of the Obama approach, both main parties have said the UK market is different and requires different solutions.While stressing their support for the underlying principles of the Obama approach, both main parties have said the UK market is different and requires different solutions.
Wrong focusWrong focus
Labour says breaking up British banks is not appropriate as they are global and curbs on their activities of will force them overseas. Labour says breaking up British banks is not appropriate as they are global and curbs on their activities will force them overseas.
In a Sunday Times interview, Chancellor Alistair Darling said reform should not focus on the structure of banks but controlling risk and ensuring firms held sufficient capital to cover their liabilities. Chancellor Alistair Darling has said reform should not focus on the structure of banks but controlling risk and ensuring firms held sufficient capital to cover their liabilities.
"If everyone does their own thing, it will achieve absolutely nothing," he said. "You could end up dividing institutions and making them separate legal entities but that isn't the point. His Tory counterpart George Osborne says he backs "Obama-style" regulation, as opposed to the "failed model" supported by ministers, but says reforms must be agreed globally.
"The point is the connectivity between them in relation to their financial transactions." He has ruled out a British replica of the Glass-Steagall law as "crude", saying he will not back any proposals which damage the City's standing as one of the world's leading financial centres.
His Tory counterpart George Osborne says he backs "Obama-style" regulation as opposed to the "failed model" supported by ministers. In his speech, Mr Cable also called for much more choice for bank consumers through new "local" lenders, credit unions and mutuals catering for the financially excluded, and a Post Office bank.
But he has ruled out a British replica of the Glass-Steagall law as "crude" and says the focus must be on isolating the most high-risk trading activities with the potential to bring a bank down.
He has called for an international agreement and said the Tories, if elected, will not back any proposals which damage the City's standing as one of the world's leading financial centres.
In his speech, Mr Cable will also call for much more choice for bank consumers through new "local" lenders, credit unions and mutuals catering for the financially excluded and a Post Office bank.