Nick Clegg: banking reforms could come in ‘well before’ 2019

Lib Dem leader says date of implementation of reforms could be far earlier than that recommended by Sir John Vickers’ Independent Commission on Banking Nick Clegg, the Liberal Democrat leader and deputy prime minister, has said banking reforms designed to prevent another taxpayer bailout of the system could be implemented “well before 2019″. Clegg said he thought the date of implementation for reforms of Britain’s biggest banks could be far earlier than that recommended by the Independent Commission on Banking, chaired by Sir John Vickers. The commission’s report – published earlier this month – said banks should ring-fence their high street banking businesses from their “casino” investment banking arms, but gave the UK’s biggest banks until 2019 to do so – longer than had been expected. Clegg said he was “pretty confident” that the 2019 deadline was merely a “backstop date”, adding that he wanted the legislation in place “as quickly as possible”. “As long as we legislate during this parliament I suspect, actually, the changes will be implemented well before 2019,” he told BBC Radio 4′s Today programme. His claims appeared at odds with the line taken by David Cameron last week. The prime minister said the 2019 deadline had been recommended so the UK reforms coincided with the date when new international capital standards must be in place. Clegg outlined his views on the timeline for change as he underlined Liberal Democrat determination to deliver changes in the way banks operate, including pay and bonuses. Asked when the legislation on the Vickers recommendation would be introduced, he said the government would “legislate in full” by the end of this parliament so there was “no risk of slippage and somehow kicking it into the long grass”. “On that, we have been utterly unambiguous,” he said. Clegg added that he would like the measures to be included in the financial services bill, which has just started its passage through parliament, if it were possible to do so. But he said: “I think all of us at the top of government, including the chancellor, would like to see this done as quickly as possible. Quite sensibly, George Osborne [the chancellor] and the Treasury have said this is an immensely complicated issue, exactly as I have discovered as I have delved into the technicalities of how a ring-fence would work. “It’s extraordinarily technical, but we are not going to make promises about doing it more quickly than we think we might, and we need a little bit of time to get the details right. “Vickers has said all of this needs to be implemented by, at the latest, 2019. I’m pretty confident that … is a backstop date.” Speaking as Lib Dem delegates congregated for the fourth day of their annual party conference, Clegg was also asked whether he had softened his stance on bank bonuses, which he had previously called “gratuitously offensive”. He admitted he would have liked more progress, but said those at the top of banks in state ownership had “legally watertight” contracts, signed before the coalition came into power. He cited Project Merlin – a deal struck earlier this year under which the largest UK banks pledged to lend about £190bn to businesses, including £76bn to small firms, this year. Clegg said progress was being made, but made it clear that, if banks did not deliver on Project Merlin, “all bets are off”. He also used the interview to defend the government’s deficit reduction strategy, arguing that changing course now would be “exactly the wrong thing to do”. Citing the downgrading of Italy’s ability to service its own debts, he said governments that did not show the political will to balance their own books “lose control over their own destiny”. But he added that deficit reduction alone was not the “magic recipe for growth”. “Deficit reduction is not everything,” he said. “You don’t create growth simply by balancing the books. “There are other … there are so-called supply-side measures, you bring taxes and regulation down for businesses, but there is also – and this is the thing that we’ve been talking about more in the Liberal Democrat conference – there are things government can do to stimulate both confidence and demand.” Talking about the eurozone crisis, he said no one foresaw that the rules set up when the zone was created would be so spectacularly ignored and broken. He blamed the French and German governments for not “looking after their affairs properly”, leading to problems throughout the zone. Clegg said he thought it very unlikely that Britain would join the euro while he was Lib Dem leader. “I doubt very, very much that, during my political lifetime – certainly as the leader of the Liberal Democrats – that we will see the UK enter into the euro,” he said. And he reaffirmed that the he intended to “see this coalition through” to the general election “and beyond”, as he played down suggestions that his wife had pleaded with him to leave his position in 2015. “There are so many things I want to tell you in this very intimate conversation when no one’s listening, but I can’t tell you about conversations Miriam and I have,” he said. Liberal Democrat conference 2011 Economic policy Nick Clegg Liberal Democrats Liberal Democrat conference David Cameron George Osborne Liberal-Conservative coalition Banking reform Banking Financial sector Banks and building societies Hélène Mulholland guardian.co.uk

Posted by on September 20, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.