t: 020 7219 8155 e: fieldm@parliament.uk

February 8, 2013

Mark appeared on Friday’s Daily Politics to discuss banking reform. You can view that appearance at around 9 minutes in on BBC iPlayer. Mark’s notes on the issues being discussed can be read below.

 http://www.bbc.co.uk/iplayer/episode/b01qmrgc/Daily_Politics_08_02_2013/

RINGFENCE

–          I have always been sceptical about the practicability of a ringfence; if it is such a great idea, why is it not being followed elsewhere? The Volcker/Liikanen variants are also creating a recipe for uncertainty.

–          The ringfence is George Osborne’s ‘baby’. But in accepting the draconian sanction of possible break-up, his pragmatic move adds a further unwelcome layer of uncertainty/insecurity to this critical sector of the UK economy.

LIBOR

–          Superficially attractive and populist to clampdown on RBS bonus pool as punishment for LIBOR misdemeanours. However it risks undermining further the value of taxpayers’ stake in the bank.

–          Truth is we need banks more than ever; beset by 20/20 hindsight which characterises virtually every novel marketed product of past decade as ‘missold’. Real impediment to proper functioning of banks; i.e. lending to real economy.

MARK CARNEY

–          Real risk that so much hope and expectation is being placed in his arrival in July as saviour of UK economy.

–          Predictably headlines of Treasury Select Committee hearing surrounds his bumper salary package…expect this vein to continue.

–          Suspect he will in key areas reflect more of a continuation of policy than currently expected. Signalled he will pursue ultra low interest rates (this attracted him to the Chancellor, I suspect) and willingness to print more money as main tool of stimulus (QE will not rapidly be consigned to history, more’s the pity).

–          Ultimately the challenge that Mr Carney faces will not be about growth (which will probably return in 2014/15) but diminished living standards.