Banks accused of ‘dishonest’ lobbying
A leading UK regulator has warned that efforts by banks lobbying against tougher regulations are “intellectually dishonest and potentially damaging.”
Robert Jenkins, who was named in July to the Bank of England’s Financial Policy Committee, a new body charged with protecting financial stability, said the banks’ latest lobby tactic was to “convince pundits, public and politicians” that larger bank capital buffers would hit the economy hard.
“A profession which should stand for integrity and prudence now supports a lobbying strategy that exploits misunderstanding and fear,” Mr Jenkins said.
Instead he said Banks could beef up capital by cutting bonuses, by cutting risk-taking between lenders and raising term debt and equity.
“Banks can strengthen their balance sheets without harming the economy. They can do so by cutting bonuses, by curtailing intra-financial risk-taking and by raising term debt and equity.
“Bank lobbies are winning the battles and losing the war. As for bank leaders, they need to lobby less and lead a lot more.”
He said banks lacked long term vision and were inadvertently harming their own industry
“For in pursuing its short-sighted approach, the banking lobby is unwittingly making the case for more intervention in an industry which refuses to reform,” Jenkins said.
The FPC is tasked with spotting broader, system-wide risks and taking action before they destabilise markets.
Its next set of recommendations is due at the start of December.
