Bankers’ efforts to water down tougher new regulations by claiming they will harm economic growth are “intellectually dishonest and potentially damaging” and could inspire an even more robust crackdown, a leading UK regulator has warned.
“A profession which should stand for integrity and prudence now supports a lobbying strategy that exploits misunderstanding and fear,” said Robert Jenkins, who was named in July to the 11-member Financial Policy Committee, a new body charged with protecting financial stability.
“Banks can strengthen their balance sheets without harming the economy. They can do so by cutting bonuses, by curtailing intra-financial risk-taking and by raising term debt and equity,” he said.
My comments: These are strong words, but I agree with the views expressed by Robert Jenkins. Actually, I prefer that commercial banks should return to their core functions of payments and loans, and should not be speculating in the markets.