Angela Knight, British Bankers' Association Head, Says Plans To Reform Banking Sector Should Be Put On Hold
PRESS ASSOCIATION -- Plans to reform the banking sector should be put on hold until the economy has recovered and taxpayers have been repaid for bailing out the banks, the head of the British Bankers' Association has said.
Chief executive Angela Knight argued that now was not the right time to add to the sector's regulatory burden.
Her comments come a fortnight before the Independent Commission on Banking (ICB) is due to publish its final recommendations on how to increase stability and competition in UK banking.
It is expected to recommended ring-fencing banks' retail operations from their investment banking arms, although it will be up to Chancellor George Osborne to decide whether and at what pace to implement any reforms.
The Independent newspaper reported that Ms Knight believed markets and economies were more fragile than when the ICB published its interim report in April and that imposing reforms on lenders risked denting confidence and cutting the supply of credit to the economy.
She added: "We have a high degree of uncertainty, market turbulence and lack of confidence that governments in other countries have got a sufficient grip on their economies. We are in for a very difficult autumn.
"This is, therefore, the time to concentrate on economic recovery and paying back... the Government and taxpayers.
"By all means think about new regulation but now is not the time to add that as an overlay with respect to costs, uncertainty or whether it is going to do anything beneficial anyway."
Ms Knight said the ICB must offer its proposals for debate in the context of other changes already in train, such as new rules on capital requirements.