20 July 2009
Cameron and George Osborne today launched the
Conservative Partys Policy White Paper on
Banking. The White Paper sets out the Conservative
plan for sound banking that will lead the British
economy from crisis to confidence and is an essential
component of a sustained economic recovery. Launching
the paper David Cameron said last autumn,
our financial system suffered its most destructive
crash since the 1930s, taking an economy already
in recession and plunging it further into the
mire. The decisions that led to this crisis represent
a policy failure of historic proportions."
The white paper sets out
Conservative policy to:
- Abolish the Financial
Services Authority and abolish the Tripartite
regime it operated with the Bank of England
and the Treasury.
- Create a strong and powerful
Bank of England with the authority and powers
necessary to ensure financial stability.
- Create a powerful Consumer
Protection Agency that will bring together in
one place the consumer powers currently and
confusingly split between the old FSA and the
Office of Fair Trading.
- Demand that banks set
aside much more of their own money, or capital,
for their risky lending as a form of insurance
- Appoint a Treasury Minister
with special responsibility for fighting our
corner in Brussels so that European regulations
are right for the City of London.
- We will also ask the
Office of Fair Trading and the Competition Commission
to conduct a focused examination of the effects
of consolidation in the retail banking sector.
David Cameron added Ten
months on, the banking system remains broken,
held together by billions of pounds worth of taxpayer
loans and government guarantees. The public finances
are awash with red ink, burdening every child
born today with £22,500 worth of debt.
"Businesses are still
going bust, houses are still getting repossessed
and unemployment queues are still rising at an
The decisions that led to
this crisis represent a policy failure of historic
We now need deep, wide-ranging
reform that matches both the magnitude of the
crisis and the scale of the hardship inflicted
on the British public.
That reform must be based
on a clear understanding of what went wrong in
the first place and a clear determination
to put it right.
I believe three things led
to this crisis.
- First, this Governments
imprudent attitude to debt as it failed to fix
the roof when the sun was shining.
- Second, no one took responsibility
while debt across the whole economy spiralled
out of control.
- Third, irresponsible behaviour
in some of our banks was allowed to go unchecked
and the financial system become unstable.
And it will be the economic
priority of a Conservative Government to address
each of these in turn."
Click to download a copy
of the Conservative
White Paper on Sound Banking (2.50MB, )