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Just what is Milliband trying to achieve here?
Does he think he knows better than the Govener of the Bank of England?
//Earlier this week, Bank of England governor Mark Carney said a cap on banks' market share "would not result in substantial improvement to competition".//
And from Vince:
//Business Secretary Vince Cable said he agreed with Mr Miliband's desire for increased competition but insisted that "many of the things he is calling for have actually happened".//
Rather makes it look like our Ed is grasping at straws by Baker bashing !
Just what is Milliband trying to achieve here?
Does he think he knows better than the Govener of the Bank of England?
//Earlier this week, Bank of England governor Mark Carney said a cap on banks' market share "would not result in substantial improvement to competition".//
And from Vince:
//Business Secretary Vince Cable said he agreed with Mr Miliband's desire for increased competition but insisted that "many of the things he is calling for have actually happened".//
Rather makes it look like our Ed is grasping at straws by Baker bashing !
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Well his objective is pretty much inline with this Governments own stated objectives, and with the Independent Commission on Banking conclusions - that the UK Banking sector lacked competition, and that greater competition would be beneficial for small businesses and your average consumer.
The questions are - Is that conclusion actually correct? ( Most financial commentators and experts agree that it is - that more competition would be beneficial) And if so, what is the best way of achieving that?
As best I can tell, what Miliband is proposing is inline with current US banking policy - where no single bank can hold more than 10% of the total domestic banking deposits.
I am not sufficiently well versed in finance and banking to know what this might entail but in theory at least the idea introducing greater competition should be fairly uncontroversial. Carney was making the observation that introducing such competition would not necessarily lead to a better, cheaper,more consumer friendly environment and he might well be right, but just settling for the status quo is not an option either, it seems to me.
The questions are - Is that conclusion actually correct? ( Most financial commentators and experts agree that it is - that more competition would be beneficial) And if so, what is the best way of achieving that?
As best I can tell, what Miliband is proposing is inline with current US banking policy - where no single bank can hold more than 10% of the total domestic banking deposits.
I am not sufficiently well versed in finance and banking to know what this might entail but in theory at least the idea introducing greater competition should be fairly uncontroversial. Carney was making the observation that introducing such competition would not necessarily lead to a better, cheaper,more consumer friendly environment and he might well be right, but just settling for the status quo is not an option either, it seems to me.
one of the points that came out of the discussion on newsnight was about retaining or hiring good staff in key positions in our banking sector,
not sure if it was RBS but one large organisation still has no finance director, hitting the salaries and bonuses seem the way that Milliband wants to do this, if you have a massive sweep out of the top brass because they won't be dictated to by him, Cameron, or by the EU what happens to the banks, and who is running them. Like it or not our banking sector is a money making business, it generates lot of dosh for the country as a whole and not just for the capital, so say all the leading players, including Mark Carney and Lord King.
not sure if it was RBS but one large organisation still has no finance director, hitting the salaries and bonuses seem the way that Milliband wants to do this, if you have a massive sweep out of the top brass because they won't be dictated to by him, Cameron, or by the EU what happens to the banks, and who is running them. Like it or not our banking sector is a money making business, it generates lot of dosh for the country as a whole and not just for the capital, so say all the leading players, including Mark Carney and Lord King.
" Like it or not our banking sector is a money making business, it generates lot of dosh for the country as a whole and not just for the capital, so say all the leading players, including Mark Carney and Lord King"
It is also the sector that brought global economy to its knees through reckless gambling. And it is money making, yes, just disproportionately more for the banking sector itself.
The idea of introducing greater competition into the banking sector is entirely uncontroversial. The Government themselves want it. The Independant Commission on Banking agree. The Parliamentary Select Committee on Banking agree.
The devil is in the detail - how to you go about it? One thing is for sure - the status quo is not an option.
It is also the sector that brought global economy to its knees through reckless gambling. And it is money making, yes, just disproportionately more for the banking sector itself.
The idea of introducing greater competition into the banking sector is entirely uncontroversial. The Government themselves want it. The Independant Commission on Banking agree. The Parliamentary Select Committee on Banking agree.
The devil is in the detail - how to you go about it? One thing is for sure - the status quo is not an option.
// We will restore the bank’s historic role in monitoring
the overall growth of credit and debt in the economy. in addition, we will:
• increase competition in the banking industry, starting with a study of competition in the sector to inform our strategy for selling the government’s stakes in the banks //
Conservative Party Manifesto 2010 page 29.
And the high street banks are no more competitive now than they were 4 years ago. Didficult to say why the Conservatives haven't honoured the above pledge, whether they U-turned, forgot about it or just sheer incompetence.
the overall growth of credit and debt in the economy. in addition, we will:
• increase competition in the banking industry, starting with a study of competition in the sector to inform our strategy for selling the government’s stakes in the banks //
Conservative Party Manifesto 2010 page 29.
And the high street banks are no more competitive now than they were 4 years ago. Didficult to say why the Conservatives haven't honoured the above pledge, whether they U-turned, forgot about it or just sheer incompetence.
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The thing about competition is that surely it has to have the possibility of a winner. A competition is certainly not just ten banks running at the same pace. If no-one can win then really it's about presenting choice. But even then what choice is there? No chance to grow, no incentive to improve. And then, presumably, you find your way back to the problems you were trying to fix in the first place.
I'm hoping the above analysis isn't naive, but obviously it's based on no economics background beyond reading the papers.
I'm hoping the above analysis isn't naive, but obviously it's based on no economics background beyond reading the papers.
Would you disagree then with the notion that extra competition brings with it extra choice and serves to drive down the cost of services and to drive up the quality of service ymb? What Miliband is proposing is aligned with that principle and is inline with the following august institutions;
1. Independent Commission on Banking, established by the Coalition in 2010.
2. The Select Committee on Finance and Banking.
3. Coalition Government policy.
1. Independent Commission on Banking, established by the Coalition in 2010.
2. The Select Committee on Finance and Banking.
3. Coalition Government policy.
wiki
The service sector dominates the UK economy, contributing around 78% of GDP, with the financial services industry particularly important. London is the world's largest financial centre alongside New York,
and has the largest city GDP in Europe.
The UK aerospace industry is the second- or third-largest national aerospace industry depending on the method of measurement.
The pharmaceutical industry plays an important role in the economy and the UK has the third-highest share of global pharmaceutical R&D.
The service sector dominates the UK economy, contributing around 78% of GDP, with the financial services industry particularly important. London is the world's largest financial centre alongside New York,
and has the largest city GDP in Europe.
The UK aerospace industry is the second- or third-largest national aerospace industry depending on the method of measurement.
The pharmaceutical industry plays an important role in the economy and the UK has the third-highest share of global pharmaceutical R&D.
@Emmie I think we can recognise the financial sectors importance to overall GDP -and the threat it poses too- we only need to look back to 2008 to see how the banks brought down the global economy to see that - so; What's your point with that last post?
Everyone - This government, the Select Committee on Banking, The Independent Commission on Banking, the opposition -all agree on at least a couple of points; that retail banking be ringfenced against the more speculative actions of banks, breaking them up if necessary; and that more competition is required in the domestic banking market.
Miliband is offering one option, following the US banking statutes in order ot offer more high street competition.So, debate the merits of that option if you like, but the fundamental move toward banking reform is necessary.
Leaving everything as it is is not an option.
Everyone - This government, the Select Committee on Banking, The Independent Commission on Banking, the opposition -all agree on at least a couple of points; that retail banking be ringfenced against the more speculative actions of banks, breaking them up if necessary; and that more competition is required in the domestic banking market.
Miliband is offering one option, following the US banking statutes in order ot offer more high street competition.So, debate the merits of that option if you like, but the fundamental move toward banking reform is necessary.
Leaving everything as it is is not an option.
"Everyone - This government, the Select Committee on Banking, The Independent Commission on Banking, the opposition -all agree on at least a couple of points; that retail banking be ringfenced against the more speculative actions of banks, breaking them up if necessary; and that more competition is required in the domestic banking market."
I am more concerned by what the regulatory bodies say than "the top bods in the banking industry" who are inevitably conflicted when it comes to introducing reform into the banking sector.
And Carney is just one voice; He was cautioning that introducing competition might not have the positive impact that everyone expects, which is fair enough, but Every regulatory authority, every authoratitive voice in the banking sector accepts the need for reform and extra competition - what is in question is the manner by which that is achieved.
Just posting links to what Carney says does not really act as the final say in the discussion.
I am more concerned by what the regulatory bodies say than "the top bods in the banking industry" who are inevitably conflicted when it comes to introducing reform into the banking sector.
And Carney is just one voice; He was cautioning that introducing competition might not have the positive impact that everyone expects, which is fair enough, but Every regulatory authority, every authoratitive voice in the banking sector accepts the need for reform and extra competition - what is in question is the manner by which that is achieved.
Just posting links to what Carney says does not really act as the final say in the discussion.
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