Business Secretary Vince Cable was last week at the centre of a clash over banking reforms.
Cable said bankers were being “disingenuous in the extreme” in arguing for a delay in plans by the independent banking commission (IBC) to force banks to ringfence their retail and investment banking operations.
However, Cable has since softened his position, as the more stringent capital requirements this will impose will not take effect until 2015 at the earliest. “The balance is growth, and growth has to stay at the top of the agenda,” said Cable.
CBI director-general John Cridland had claimed last week that the forced separation of retail and investment banking operations would put economic recovery at risk. “Taking action at this moment – this moment of growth peril, which weakens the ability of banks in Britain to provide the finance that businesses need to grow – is just to me barking mad,” he said.
CBI president Roger Carr described the 2015 target as a “more thoughtful position as things stand today. There is no challenge to the principle – the issue is timing of enforcement,” he said.