Home » Posts tagged "Financial Institutions (Reform) Bill"

Tag Archives: Financial Institutions (Reform) Bill

Two questions in the House on an EU referendum and responsibility in banking

Today, I had two questions during statements. I welcomed the progress the Prime Minister is making towards a referendum on our relationship with the EU and asked him to remind us who denied the public a say on the Lisbon Treaty – Labour. I then asked the Chancellor to look again at my Financial Institutions (Reform) Bill, which would transfer commercial risk into the banks, ending the incentives which create a culture of recklessness and rule-breaking. Questions are useful, but […]

Tags: , , , , ,

Two simple steps to transform the culture of banking and to forestall the next outrage

Post Image

It’s time to privatise commercial risk in banking and insist on prudent accounts. Government should: Eliminate moral hazard from the financial system by implementing this measure to make bank directors strictly liable without limit and to treat as capital both directors’ personal bonds and, for five years, the bonus pool. Introduce prudent bank accounting so banks can’t game the rules using derivatives to manufacture illusory profits from unrealised cash flows. The banking system isn’t capitalist It’s not capitalism when private individuals […]

Tags: , , , , , , , ,

Writing for The Express, Stephen Pollard backs my Bill to make bankers responsible

Via Express.co.uk – Make the bankers personally liable for risks they take, Stephen Pollard backs my bill to make bankers responsible for their own actions: This isn’t capitalism – it is taxpayer-guaranteed gambling. It is basic human nature that only when people are held responsible for their actions do they act responsibly. The flawed behaviour of those behind this latest scandal – the greed, the lying and the warped idea of entrepreneurialism – is hardly new. A working banking system should be […]

Tags: , ,

The Barclays LIBOR scandal – the world seems to have shifted towards my last bill: those at the top must be held responsible.

The Prime Minister has said he wants responsibility in banking, right to the top. The National Association of Pension Funds wants bonus clawbacks from the people who made the related trades.  There’s endless talk of the irresponsible culture in banking. All that is addressed by my last bill. Nick Robinson just mentioned politicians trying to catch up with people’s anger. I guess he has not spotted my proposed measures to make directors and staff of financial institutions liable for the consequences […]

Tags: , , , , ,

In the House today: Financial Services and Prudential Requirements

This afternoon an EU document relating to Financial Services and Prudential Requirements was placed before the House of Commons. It was not debated: debate took place in Committee last week. I attended, though I was not formally assigned to the Committee. The EU’s proposals amount to further European Union encroachment and unnecessary regulation: the document, rather than teaching granny to suck eggs, teaches bankers to make loans. It is fundamentally misguided. The EU’s preoccupation with attempting to regulate away the […]

Tags: , , , , , , ,

Speech on the Financial Institutions (Reform) Bill

I was delighted today that my ten-minute rule Bill was introduced without opposition. This late in the Parliament, the Bill itself is extremely unlikely to make further progress but I was glad to put the following on the record (these are my notes – Hansard is here: Mr Speaker, I beg to move that leave be given to bring in a Bill to enforce strict liability on directors of financial institutions; to require directors of financial institutions to post personal […]

Tags: , , , , , ,

Financial Institutions (Reform) Bill – Other measures

In previous articles, I set out why it’s necessary to address risk-taking incentives in banks and how losses would be covered from the bonus pool and director’s personal bonds before hitting equity. This article sets out other necessary provisions. 5. Accounting standards 5.1 For the purposes of the Bill, all relevant figures (measures of profit, loss, capital, bonuses, personal bonds posted, etc.) would be obtained using parallel prudent accounting rules i.e. UK GAAP under Companies Act legislation. This was proposed in […]

Tags: , , , , , ,

Financial Institutions (Reform) Bill – Use of personal bonds and bonus pool to make good bank losses

Yesterday, I began to set out how my proposed Financial Institutions (Reform) Bill would meet the need for a vibrant, reliable and robust banking system by adjusting bank directors’ and employees’ exposure to commercial risk. That article described changes to bank directors’ liability and the treatment of bonuses. This article explains how losses would be made good and defines core capital. 3. Use of personal bonds and bonus pool to make good bank losses 3.1 Should a bank report losses […]

Tags: , , , , , ,

Financial Institutions (Reform) Bill – Liability of bankers and treatment of bonuses

A developed society like ours needs a good means of exchange, unit of account and store of value: a good money. It also needs a vibrant, dynamic, reliable and robust means of executing payments and intermediating savings to entrepreneurs: we need a good banking system. Unfortunately, Of all the many ways of organising banking, the worst is the one we have today. And I agree with the Governor of the Bank of England. He said elsewhere in that speech, “At the […]

Tags: , , , , , ,

The BoE’s Andrew Haldane: “The best proposals for [bank] reform are those which aim to reshape risk-taking incentives on a durable basis”

While preparing to seek permission to introduce my Financial Institutions (Reform) Bill, I discovered a recent article by the Bank of England’s Executive Director for Financial Stability, Andrew Haldane, The Doom Loop: Equity in Banking: The continuing backlash against banking, as evidenced in popular protests on Wall Street and in the City of London, is a response not just to the fact that the world is poorer, as pre-crisis riches have turned to rags, but to the way these riches were privatised, […]

Tags: , , , , , ,

← Older posts