This article is from the source 'guardian' 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.guardian.co.uk/uk/2013/apr/22/justin-welby-labour-regional-banks
The article has changed 6 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Archbishop of Canterbury calls for introduction of regional banks | |
| (about 9 hours later) | |
| The archbishop of Canterbury warned on Monday night that Britain was mired in an economic depression and called for major steps to drag the country out of it, including the breakup of a major bank in order to create regional lenders. | The archbishop of Canterbury warned on Monday night that Britain was mired in an economic depression and called for major steps to drag the country out of it, including the breakup of a major bank in order to create regional lenders. |
| The proposal, which has echoes of a policy recently espoused by Labour, was contained in an address that marked one of Justin Welby's most significant forays into public policy since be was enthroned last month as the new leader of the Church of England. | The proposal, which has echoes of a policy recently espoused by Labour, was contained in an address that marked one of Justin Welby's most significant forays into public policy since be was enthroned last month as the new leader of the Church of England. |
| Speaking just days before key GDP data is expected to show the economy remains stalled, Welby told a Westminster discussion on the financial crisis organised by the Bible Society: "Economic crises are a major problem when they are severe. When they are accompanied by a financial crisis and a breakdown in confidence then they become a generational problem. | Speaking just days before key GDP data is expected to show the economy remains stalled, Welby told a Westminster discussion on the financial crisis organised by the Bible Society: "Economic crises are a major problem when they are severe. When they are accompanied by a financial crisis and a breakdown in confidence then they become a generational problem. |
| "Historically, the great failures in banking have led to very, very long periods of recession at best. I would argue that what we are in at the moment is not a recession but essentially some kind of depression. It therefore takes something very, very major to get us out of it in the same way as it took something very major to get us into it." | "Historically, the great failures in banking have led to very, very long periods of recession at best. I would argue that what we are in at the moment is not a recession but essentially some kind of depression. It therefore takes something very, very major to get us out of it in the same way as it took something very major to get us into it." |
| Welby, a former oil executive who is serving on the parliamentary commission into banking, said no one had all the answers, but a key move to rebuild confidence was making sure people could no longer "drift" into senior banking positions. Problems were created when banks became distant from the communities they served, he said. "At least part of the banking system should be local". | Welby, a former oil executive who is serving on the parliamentary commission into banking, said no one had all the answers, but a key move to rebuild confidence was making sure people could no longer "drift" into senior banking positions. Problems were created when banks became distant from the communities they served, he said. "At least part of the banking system should be local". |
| The Anglican leader said the simplest solution to recreate a local banking system was "recapitalising at least one of our major banks and breaking it up into regional banks". | The Anglican leader said the simplest solution to recreate a local banking system was "recapitalising at least one of our major banks and breaking it up into regional banks". |
| He cautioned against allowing the banking system to become too concentrated in the mistaken belief that it was safer. "As a bank, you can be big and simple or small and complicated, and do well. If you get big and complicated, you become unmanageable," he said. | He cautioned against allowing the banking system to become too concentrated in the mistaken belief that it was safer. "As a bank, you can be big and simple or small and complicated, and do well. If you get big and complicated, you become unmanageable," he said. |
| Intentionally or otherwise, Welby's comments on regional lenders have parallels with policies put forward last month by the Labour party, which proposed a network of regional banks to help small business get access to finance. | Intentionally or otherwise, Welby's comments on regional lenders have parallels with policies put forward last month by the Labour party, which proposed a network of regional banks to help small business get access to finance. |
| The idea, which was put forward by Ed Miliband at the annual conference of the British Chambers of Commerce, is based on a German model of community banks. | The idea, which was put forward by Ed Miliband at the annual conference of the British Chambers of Commerce, is based on a German model of community banks. |
| Welby said he had been disappointed to discover during evidence sessions of the banking commission that "bankers are not nearly as bad as one hoped that they would be". "They do not come in with horns and a tail burning £50 notes to light large cigars, and involved in casino banking and arcane and complex structure projects, so much as coming in and having to admit - or showing - that what they had done was the slightly unsophisticated error … essentially was to borrow short and lend long - one classic error - and secondly they lent very, very large amounts of money to people who could not pay them back. | Welby said he had been disappointed to discover during evidence sessions of the banking commission that "bankers are not nearly as bad as one hoped that they would be". "They do not come in with horns and a tail burning £50 notes to light large cigars, and involved in casino banking and arcane and complex structure projects, so much as coming in and having to admit - or showing - that what they had done was the slightly unsophisticated error … essentially was to borrow short and lend long - one classic error - and secondly they lent very, very large amounts of money to people who could not pay them back. |
| "Those two errors alone are quite enough to bankrupt any bank. They are not sophisticated errors, they are the reality." | "Those two errors alone are quite enough to bankrupt any bank. They are not sophisticated errors, they are the reality." |
| He pointed out that HBOS had lost 10% of its total loan portfolio, and 30% of its portfolio in Australia, before having to be rescued. | He pointed out that HBOS had lost 10% of its total loan portfolio, and 30% of its portfolio in Australia, before having to be rescued. |
| "That simply is going to bring anyone down," he added. | "That simply is going to bring anyone down," he added. |
| guardian.co.uk today is our daily snapshot of the top news stories, sent to your inbox at 8am | guardian.co.uk today is our daily snapshot of the top news stories, sent to your inbox at 8am |