Latest news with #JohnVickers
The Guardian
16-07-2025
- Business
- The Guardian
Rachel Reeves warned by City grandees not to weaken banking safeguards
Rachel Reeves has been warned by City grandees that her plan to slash financial red tape could have little benefit for British households while increasing risks in the banking industry. The chancellor used a speech to City bosses attending the annual Mansion House dinner on Tuesday to argue that in too many areas regulation was acting as a 'boot on the neck of business', as she pledged sweeping changes to help revive the economy. However, leading figures in involved in Britain's post-2008 drive to prevent a repeat of the financial crisis warned Labour against unpicking bank ringfencing – a key measure introduced after the collapse. Sir John Vickers, the architect of the UK's ringfencing rules, deployed after the financial crisis to separate high street banking from riskier investment banking, said a wholesale retreat from the reform would be a 'very bad idea'. Lord Turner, who took over as chair of the Financial Services Authority during the 2008 crash and played a leading role in the post-crisis redesign of the banking system, also warned the chancellor to proceed with caution. He said: 'The costs of getting it wrong far outweigh the gains from loosening the requirements and allowing riskier activity by banks.' Lord Tyrie, who chaired the post-crisis parliamentary commission on banking standards, said it would be 'imprudent' to scrap ringfencing after banks had invested huge sums in separating retail banking from their riskier activities. Now a Conservative peer, he warned in 2012 that the ringfence needed 'electrification' to discourage banks from lobbying future governments. He said: 'As the banking commission, which I chaired, strongly argued, it needs to be kept under constant review and where necessary adapted. From the Mansion House speech we have very little information about what is intended so far. Succumbing to lobbying in the misplaced belief that watering it down would somehow release the economy to a higher growth path would be a serious misjudgment.' Reeves on Tuesday committed to 'meaningful reform' of the safeguards, with the government saying it would review the rules in an effort to strike a balance between ensuring financial stability and supporting economic growth. However, Vickers said: 'Nothing is perfect, I am sure that its [ringfencing] implementation is capable of improvement. But a radical rowing back on it would be a very bad idea. 'It would remove a layer of protection, for the everyday banking that firms and households depend on, from global shocks. Look what happened last time. I am not saying ringfencing would have prevented 2008-09, which was a global event. But the damage to the UK, including to UK growth prospects, would have been much lower if we had such a regime in place.' As recently as last month the Bank of England governor, Andrew Bailey, warned ministers against watering-down the rules, arguing that it led major banks to funnel more cash to their global investment arms at the expense of British businesses and households. Earlier this year, the bosses of four of the UK's biggest banks – HSBC, Lloyds Banking Group, NatWest and Santander UK – wrote to Reeves to lobby for the removal of the ringfencing rules, arguing that it was a drag on lending to the British economy. However, Bailey wrote in a letter to the Commons Treasury committee that ringfenced banks faced 'no restrictions on lending' to UK firms. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion He said: 'Removing the ringfence would most likely have a negative effect on UK lending, both in terms of cost and quantities, with banks directing funding from retail deposits away from UK households and SMEs [small and medium-sized enterprises] and towards investment banking activities or activities outside the UK.' Vickers said it would be ironic if Reeves rolled back ringfencing in the name of supporting British firms and households. 'It doesn't help the UK growth objective. It would increase risk for no benefit.' Turner said it was important to review City rules, but cautioned: 'The fundamentals of the reforms we put in place – the ringfencing of retail activities and the capital requirements on systemically important banks – need to remain the bedrock of UK regulation.' The Treasury said it would work with the Bank of England's Prudential Regulation Authority to consider if ringfenced banks could provide more products and services to UK businesses, if inefficiencies could be tackled, and if banks should be allowed to share resources and services more flexibly across the ringfence. Led by the Treasury minister, Emma Reynolds, the review would report by early 2026. It said: 'The government is committed to upholding the ringfencing regime to protect financial stability and safeguard depositors. However, the government also intends to take forward meaningful reforms to the regime to support its growth agenda.'
Times
15-07-2025
- Business
- Times
Rachel Reeves urged not to weaken UK's post-crisis bank regulations
The architect of the ring-fencing rules for banks has warned ministers that it would be a 'bad idea' to fundamentally weaken the regime after the chancellor set out plans to loosen what was the centrepiece of Britain's post-crisis financial regulation. Rachel Reeves pledged on Tuesday to make 'meaningful reforms' to ring fencing, which was brought in after the 2008 banking meltdown and forced lenders to legally separate their high street businesses from riskier investment banking divisions. It follows fierce criticism of the regime in recent months from the bosses of some of Britain's biggest banks, who wrote to the chancellor in April calling on her to abolish the rules altogether, arguing that they were inefficient and had been superseded by other reforms. • Rachel Reeves to relax bank ring-fencing rule to boost growth While the Treasury said it was 'committed to upholding' ring fencing, it revealed it would review the rules to examine 'how changes can strike the right balance between growth and stability'. This prompted Sir John Vickers, who led the government-backed commission that originally proposed ring fencing in 2011, to caution Reeves against going too far with any changes. 'There may well be scope to improve ring fencing's implementation but any weakening of the basic architecture would be a policy mistake and a bad idea,' he told The Times. 'It would remove an important element of safety and soundness regulation of UK banking, and not help the policy objective of more investment and growth in the UK economy.' The Treasury said that areas its review would examine included allowing ring-fenced divisions to offer more services to UK businesses and greater flexibility to share back-office resources across a bank's ring fence. It was one of a flurry of regulatory changes unveiled by Reeves on a visit to Leeds, which the chancellor said would 'put the UK ahead in the global race for financial businesses'. The overhaul was announced just hours before Reeves made a highly anticipated speech to City grandees at Mansion House, in which she called her revamp the most wide-ranging regulatory reform package for financial services in more than a decade. The reforms include: • An overhaul of the Financial Conduct Authority's sweeping consumer duty rules, which were only introduced in July 2023, to tackle worries about how the regime affects the way businesses interact with each other.• Streamlining the senior managers regime, which is a set of post-crisis regulations aimed at ensuring finance executives are held accountable for their actions.• The creation of a new 'concierge service' to help overseas financial firms enter the UK, and the establishment of a listings taskforce to attract companies to the London stock market. • Reform of the Financial Ombudsman Service, which resolves consumer disputes with firms, to address industry concerns that it has become an unpredictable 'quasi-regulator'. • Rule changes by the Bank of England to reduce capital requirements on lenders, including a plan to cut red tape on small and mid-sized banks to boost their ability to compete in the mortgage market. The chancellor's overhaul package, dubbed the 'Leeds reforms', seeks to 'rewire' Britain's financial system. It comes as pressure mounts on Reeves to show that the government can turbocharge the UK's faltering economy. The Treasury said its aim was to double the growth rate in UK net exports of financial services by 2035 and to 'tear down the barriers to attracting investment in the finance sector'.
BBC News
19-05-2025
- General
- BBC News
Sale of Barnsley military properties 'dishonours' war hero
A former army veteran has spoken out over the decision by an armed forces charity to sell off military cottages built in honour of his brother in bungalows, known as the McKay VC Memorial Cottages, in Hoyland, were built in 1988 and dedicated to Sgt Ian John McKay, who was posthumously awarded the Victoria being built to house disabled military veterans the Soldiers, Sailors, Airmen and Families Association (SSAFA) sold the properties in 2024 to Mountview Estates. While veterans still living on the site have been told they can stay for the rest of their lives, Mr McKay's brother-in-law John Vickers, 58, said he did not want his relative's memory "tainted". Sgt McKay, from Wortley, served in the Falklands and died aged 29 during the Battle of Mount Longdon in 1982 while trying to save his fellow soldiers from enemy was posthumously awarded the Victoria Cross (VC), the UK's top military Vickers said: "He was obviously a fair bit older than me but he was a magnificent calm individual, warm and loving""He was the reason I joined the army" he served with the Queens regiment on tours in Gibraltar and Northern Ireland before leaving the force in 1991 after suffering an injury in Cyprus. Veterans currently living in the bungalows on Pine Close in Hoyland told the BBC last year how unsettling the sale had been for September SSAFA said they had a "binding stipulation" that all current residents could live in their properties for as long as they wished but that the sale "would free up more financial resources to help more people through the charity's core work".Mr Vickers described the approach by the military charity as "commercial short-termism dishonouring my brother-in-law's name"He added: "If you dedicate a series of buildings to the care of veterans in the name of someone who was a veteran it is behoven on the organisations involved to maintain that legacy "I'm exceptionally disappointed that this has not happened."SSAFA had an obligation to maintain them as memorial cottages, not just for one generation or just the existing residents but for a legacy of at least 125 years." In a statement a spokesperson for SSAFA said:"We understand the strength of Mr Vickers' feelings, and would like to make clear that the lifetime protected tenancies the residents of the McKay VC Memorial Cottages signed nine months ago are just that: protected and for life."They continued, "Further, the sale of the Pine Close properties is leaving a legacy of help and support to many in the military family past, present, and future, not only the residents of those properties."A spokesperson for Mountview PLC said they did not wish to comment. Listen to highlights from South Yorkshire on BBC Sounds, catch up with the latest episode of Look North
