This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-18435548#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
The article has changed 10 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| Banking White Paper to give savers more protection | Banking White Paper to give savers more protection |
| (about 1 hour later) | |
| Savers will be given greater protection if a bank fails, under government proposals that have been announced. | |
| Financial Secretary Mark Hoban unveiled the banking reform White Paper, which follows the recommendations made by the Independent Commission on Banking. | |
| He confirmed retail banking operations would be ring-fenced from riskier operations such as investment banking. | |
| Shadow chancellor Ed Balls criticised the Chancellor, George Osborne, for not making the statement himself. | |
| The ICB was set up to look at ways to make the UK banking system safer. | The ICB was set up to look at ways to make the UK banking system safer. |
| However, the government is making an important concession to banks, who were angered at the ring-fencing proposals. The British Bankers' Association has warned that the reforms could hurt the banking sector, and have a knock-on effect on the overall economy. | |
| It is looking at broadening the range of activities allowed within ring-fenced operations to include certain hedging tools, for instance to protect against interest rate and currency fluctuations, where these are sold alongside loans to small business clients. | |
| Banks have been accused of mis-selling exactly such products to small businesses in the past. | |
| "We felt that it was in the interests of business to ensure there was a wider range of instruments included in the ring-fence, including derivatives," Mr Hoban told the House of Commons. | |
| "These products are widely used. There is a need for them." | |
| Labour's Ed Balls said there were still questions to answer. | |
| "Why is the chancellor not making the statement? Or should I say the 'part-time' chancellor? | |
| "What is the chancellor running scared of?" | |
| International norm | International norm |
| BBC business editor Robert Peston says that arguably the most significant watering down of the original recommendations is a lowering of the guidance on the amount of capital banks should put aside. | BBC business editor Robert Peston says that arguably the most significant watering down of the original recommendations is a lowering of the guidance on the amount of capital banks should put aside. |
| The ICB wanted to see a significantly higher amount than under new international proposals, but our correspondent says the chancellor has decided that the UK cannot go beyond the new international norm. | The ICB wanted to see a significantly higher amount than under new international proposals, but our correspondent says the chancellor has decided that the UK cannot go beyond the new international norm. |
| The chancellor is expected to discuss the proposed reforms in his annual Mansion House speech on Thursday evening. | |
| In his speech, he will say: "We've got to stop problems here in the City of London spilling onto our High Streets and putting taxpayers' money at risk. | In his speech, he will say: "We've got to stop problems here in the City of London spilling onto our High Streets and putting taxpayers' money at risk. |
| "I believe that we have found a workable way to solve what I called the 'British dilemma' - so we are proposing to protect taxpayers in a way that does not make the UK uncompetitive as a home of global banks." | "I believe that we have found a workable way to solve what I called the 'British dilemma' - so we are proposing to protect taxpayers in a way that does not make the UK uncompetitive as a home of global banks." |
| Higher costs | Higher costs |
| Steve Davies, lead partner of retail banking at the business services firm PricewaterhouseCoopers, told the BBC that the reforms would not prevent another banking crisis. | Steve Davies, lead partner of retail banking at the business services firm PricewaterhouseCoopers, told the BBC that the reforms would not prevent another banking crisis. |
| "It won't make our banks crisis-proof. What this does is to enable a failed bank to be properly recovered in the event of a crisis," . | "It won't make our banks crisis-proof. What this does is to enable a failed bank to be properly recovered in the event of a crisis," . |
| "It does not prevent a credit crunch and it does not stop a run on the bank." | "It does not prevent a credit crunch and it does not stop a run on the bank." |
| He added that the reforms were likely to push up the cost of banking: "The cost of implementing the regulation is going to be substantial and the regulations are likely to force the banks to hold more capital back and those costs will have to be passed on." | He added that the reforms were likely to push up the cost of banking: "The cost of implementing the regulation is going to be substantial and the regulations are likely to force the banks to hold more capital back and those costs will have to be passed on." |
| The banking reform plans will remain open for consultation until draft legislation is set out in the autumn. | The banking reform plans will remain open for consultation until draft legislation is set out in the autumn. |
| Plans for the final legislation are expected to be in place by 2015. | Plans for the final legislation are expected to be in place by 2015. |