Government’s rapid sell off plan for banks gets mixed reception

The Government has announced a restructuring programme for banks where there is a major public stake, meeting with a mixed reaction.

Responding to the announcement, the British Bankers’ Association said:

“The Chancellor’s announcement that there is to be a restructuring programme for those banks where there is a major public stake is neither unexpected nor surprising. We were aware last week about plans for Northern Rock and, generally, it was always intended that public support should be short term. It is also well-known that discussions about state aid have been continuing with the EU authorities. It will take some time for these plans to work through and this is in line with EU Commissioner, Neelie Kroes’ statements that state aid should be wound down over 3 – 4 years.”

“The UK has a highly competitive retail banking sector already offering greater customer choice than in many other countries. The BBA has always welcomed competition for high street banking services and choice for customers.”

“The UK needs a successful banking sector and any plans must ensure the UK remains both internationally competitive and should help maintain our financial services industry’s leading global position. We look forward to seeing the details of the proposals in due course.”

However, Liberal Democrat Shadow Chancellor, Vince Cable has argued that a rapid bank sell off will be a poor deal for taxpayers:

“It is obviously right that British retail banking becomes more competitive in order to stop the continual ripping off of customers. But there’s no justification for a rapid sell off of state assets in the current depressed environment when the taxpayer will get a very poor deal. This is a long-term project and the most important priorities are to make sure banks lend to good customers, especially businesses, in order to stave off deepening recession and growing unemployment and that the taxpayer gets value for money.”

“What is particularly worrying is the indication that Lloyds is trying to wriggle out of its agreement to maintain lending to good business customers. If it achieves its objectives this would be an appalling example of the short-term interests of banks being put ahead of national interests.”

(Photo by the justified sinner.)