Darling vows to 'get tough with banks'
Updated on 12 March 2009
Chancellor Alistair Darling tells Jon Snow that he plans to use the national and international banking regulators to keep banks in check.
The Chancellor Alastair Darling told this programme British and international regulators need "backstop" powers to tell the banks "you can't go any further"
He wants new powers to stop banks around the world from over-reaching themselves, causing "catastrophic consequences" to the world economy.
Speaking to us on the eve of the G20 finance ministers' meeting, Mr Darling also said he is not planning to extend the cut in VAT beyond the end of the year.
Alistair Darling interview
In an interview with Jon Snow, the chancellor said -
"I'd also like to see another measure, which would give regulators a backstop power when times are good, not just to make sure that banks have enough capital to meet the downturn if one comes, but also a backstop power to stop banks from over-stretching themselves - because that is one of the problems we have had to face.
Mr Darling also promised to use the IMF as an international policeman to help national regulators keep their banks in check.
"We suggested we should use the IMF simply because it exists and we wouldn't have to spend several years as an international watchdog. But critically, we will need changes in Europe. But the key thing too is to ensure our national supervisors.
"They have got the power, the national regulators have got the power, when dealing with our own banks to say: 'Look, you're overstretching yourself, you can't go any further.' And I think that would be a very, very important safeguard and all part of building confidence in the future, that we're putting our banking system on a proper footing."
