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Going out with a bang: King fires parting shot at banks

by: IFAonline
  • 26/06/2013
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Going out with a bang: King fires parting shot at banks
Outgoing Bank of England (BoE) governor Mervyn King has accused banks of attempting to influence financial regulation by putting pressure on senior politicians – including the Prime Minister.

In his final public comments before stepping down – King is being replaced by Canadian Mark Carney next month – the governor said some banks had contacted Downing Street to protest against upcoming regulatory decisions.

These included a requirement from the BoE that banks raise billions in additional capital. Five of the biggest banks need to raise an extra £13bn to meet the new regulations, according to the latest estimates.

“It is…important that banks don’t leave conversations with [their] supervisors and feel the next step is to telephone No. 11 or even No. 10 Downing Street, and lobby officials or politicians to put pressure on supervisers to back down,” King said.

“At least one conversation took place, that I know of. I think it is very important that this not be done.”

Andrew Tyrie, chairman of the Treasury Select Committee, urged the Chancellor George Osborne to look into the matter.

“Representations of the views of banks are desirable,” he said. “Attempts to influence the independent regulator are unacceptable.”

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