Bank shares soar despite George Osborne's apparent 'crackdown'

 

Investors piled into Britain’s biggest banks today as the City saw little to fear in Chancellor George Osborne’s  apparent crackdown on the financial sector.

Royal Bank of Scotland, Lloyds and Barclays also surged up the FTSE 100 amid reports that Singaporean investment fund Temasek and a consortium led by former Standard Chartered chief executive Lord Davies are among buyers eyeing a swoop for a major chunk of the taxpayer’s 39% stake in Lloyds.

The Government’s official response to the Parliamentary Commission on Banking Standards endorsed criminal changes and the threat of jail for “reckless” bankers. But the Chancellor threw out attempts by the Commission to lift leverage ratios — the amount of equity they hold as a share of their balance sheets — beyond the 3% minimum planned under incoming Basel III rules.

Raising the leverage ratio would increase costs for banks although the Commission was concerned that the 3% level was “too low”. The Commission had also pressed for the Bank’s financial policy committee to have the power to set leverage ratios and condemned the Government’s decision to delay a review of this potential move until 2017. The report said “the leverage ratio is a complex and technical decision best made by the regulator and it should certainly not be made by politicians”.

Barclays shares added 6.8p to 298.3p today, Royal Bank of Scotland roared 12.5p higher to 289.3p and Lloyds added 1.76p to 66.38p.

Despite the Chancellor’s refusal to budge on the leverage ratio, the Chancellor said the bank would work with regulators to ensure bankers’ pay is aligned with their performance.

The Chancellor said: “Cultural reform in the banking sector marks the next step in the Government’s plan to move the whole sector from rescue to recovery and ensure that UK banks demonstrate the highest standards, and are able to support business and drive economic growth.”

Business Secretary Vince Cable added: “If we’re to get our economy back on track, we need to get the banking system back on track first. Creating new powers to jail bankers who are reckless with other people’s money and getting more competition into banking is a start.”

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before