Chancellor should focus on allowing banks to fail

Imposing costly policies may drive banks away from the UK

Commenting ahead of today’s Mansion House speech, Prof Philip Booth, Editorial Director at the Institute of Economic Affairs, said:

“In revealing the government’s proposals on the regulation of the banking sector, it is important that George Osborne does not impose costly policies that will have no benefit. Already we are seeing the UK economy strangled by the lack of bank funding caused partly by additional regulation and it is important that this is not exacerbated.

“The ring-fencing of deposit-taking and other banking functions from each other is largely irrelevant and may drive banks away from the UK. It is important, though, that banks exist within a legal framework that ensure that insolvent institutions can be wound down without any costs to the taxpayer.”

 

Notes to editors

To arrange an interview, please contact Ruth Porter, Communications Director, rporter@iea.org.uk or 077 5171 7781.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.

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