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Banks branded ‘intellectually dishonest’ in fight against reform

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  • 23/11/2011
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A Financial Policy Committee member has branded lobbying tactics by banks against tighter financial regulation as "intellectually dishonest and potentially damaging".

In remarks before a debate last night, Robert Jenkins, who was appointed to the committee in July, spoke about the fight against banking reforms in the UK and internationally, which will require financial institutions to have higher capital reserves and put limits on leverage.

He said the initial tactic, to deny the need to reform after the financial crisis, was ‘dumb’.

However he said subsequent lobbying was successful and led to the Basel III proposals being watered down and delayed until 2019.

Jenkins then chided the industry for its recent tactic, of suggesting the speed of reforms will lead to a reduction in lending to the real economy.

“The latest lobby tactic is to convince pundits, public and politicians that encouraging prudence too soon will hit the economy too hard,” he said.

“This is no longer amusing. This strategy is intellectually dishonest and potentially damaging.”

Although he accepted some of the lobbying efforts had been successful, Jenkins used his own background as the former chairman of the Investment Management Association to urge the banking industry not to pursue a strategy which “exploits misunderstanding and fear”.

He said: “As a former lobbyist I understand that lobbies are there to lobby; but I also know that leaders are there to lead.

“Bank lobbies are winning the battles and losing the war. As for bank leaders, they need to lobby less and lead a lot more.”

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