Martin Kettle (The banks needed Scarman's cold eye, but Vickers blinked, 15 April) can rest assured that root-and-branch reform of the British banking system has not been forgotten about, despite a lukewarm interim report from the Vickers commission. Aside from John Vickers's modest proposals, there is a demand for the industry to be radically overhauled ? and Liberal Democrats in government will continue to press for a safer, more competitive and fairer banking system.
Amendments to the Tories' health reforms weren't the only thing called for at our recent spring conference; Lib Dems also overwhelmingly supported taking tougher action on banks and bonuses, as proposed by the Social Liberal Forum. In a motion supported by Matthew Oakeshott, among others, we called on the government to specifically address top remuneration; to fully separate high-risk and high-street banking and break up "too big to fail" super-banks; to take measures to tackle financial exclusion; and to give greater support to credit unions and mutuals.
The commission's final report is not due until the autumn, meaning there's still time to address "the failure to reform our banking in the public interest" that Mr Kettle laments.
Prateek Buch
? Vickers' interim report on banking reforms (Report, 12 April) will not stop City financial institutions speculating on obscure collateralised debt obligations, avoiding taxes by offshoring funds and being allowed to create mountains of debt under the Bank Charter Act of 1844. From a development perspective, the amount of finance capital siphoned from poorer countries in the global south, and deposited offshore, makes the UK's aid budget pale into insignificance. Only when capital controls are reintroduced on a global basis, and banks brought under public control by trust or nationalisation, will the international financial system work to benefit the majority rather than enrich the few. Alternatively, a Robin Hood tax should be levied on their speculative activities to help offset the damage done by capital flight from countries least able to afford it.
Bert Schouwenburg
International officer, GMB trade union
? The government does not need to plead with the banks to reform themselves (Editorial, 12 April): it can bypass their control of the money supply by redirecting newly created quantitative easing money at the public services instead of the banks, who just waste it. Any inflation will probably show up in the property market first and can be dealt with by a simple land value tax, possibly the so-called sentinel tax triggered by upwards movements in land prices.
DBC Reed
Northampton
Source: http://www.guardian.co.uk/business/2011/apr/16/bolster-weak-bank-reforms
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