If Reuters have adequately covered what he said this was not worth getting out of bed to hear! All he does is make a bland assertion in response to all the detailed arguments in favour of the split! He doesn’t seem to recognise the fundamental psychological difference in temperament and attitude needed at the top of these two branches of banking. But the ever-failing Lord has his prejudice which he trots out!
Christina
=================================
TELEGRAPH 2.11.09
FSA chief Lord Turner warns splitting British banks could increase risks
Breaking up Britain's banks to legally separate retail from investment banking could increase risks in the system, Lord Turner, the country's top financial regulator, said on Monday.
Reuters
Lord Turner, the chairman of the Financial Services Authority told a conference in London that there was no "silver bullet" to tackling the so-called "too big to fail" issue with systemically important banks.
"The extreme narrow banking proposal is clearly do-able in practical terms, a law could be passed which achieved this effect, but I believe would fail to address the most vital problem and could produce a financial system even more vulnerable to instability than today's," Lord Turner said. [Er - yes -- er WHY? -cs]
"Such a division would clearly not be a policy response sufficient in itself." [Who suggested it was? -cs]
Many of Britain's banks have had to be shored up at huge cost to the taxpayer, sparking a debate on whether bank's need clear legal separation of commercial and riskier investment banking activities.
Bank of England Governor, Mervyn King, has called for such break ups but has also been rebuffed by the UK government.
Lord Turner said such a "Glass Steagall" approach - named after a now defunct US law - could be best pursued through heavier capital requirements on riskier banking operations. [That’s not sufficient argument ! -cs]
Such heavier capital requirements are being worked out by the international Basel Committee on Banking Supervision and will make a "very major contribution to addressing the 'too big to fail' problem", Lord Turner said.
"We need a fundamental review of the trading book capital regime and a bias to conservatism for riskier and purely proprietary activities."
He was speaking at the FSA’s Turner Review Conference.
Posts
