Bank shares soar despite George Osborne's apparent 'crackdown'
Monday 08 July 2013
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.”
Ian McKellen and Patrick Stewart bromance continues: X-Men star gushes about 'pussy cat' BFF Patrick Stewart
David Cameron stung by jellyfish: PM hurt after ignoring advice of locals while on holiday
South Korea ferry: Vice principal rescued from sinking ship found hanged
Catherine Deneuve and Sophie Marceau in war of words over President Francois Hollande's affair with Julie Gayet
Inside North Korea with the man who won the marathon
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
- 1 KFC 'sorry' after lesbian couple are kicked out of Bath restaurant for 'heavy petting'
- 2 West Ham confirm 20-year-old striker Dylan Tombides has died after battle with cancer
- 3 24 people applied for the 'world's toughest job', here are their interviews
- 4 Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'
- 5 PFA Player of the Year: Luis Suarez, Daniel Sturridge and Steven Gerrard all nominated as Liverpool dominate award shortlist
iJobs Money & Business
£150.00 per week: QA Apprenticeships: This company has been providing on site ...
£221.25 per week: QA Apprenticeships: This company is a well established Inter...
£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...
£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...