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Tuesday, October 13, 2009

Early Day Motion on separating banks

CSM is arguing that the banks should be separated, with casino type banking separate from retail banking.

CSM Chair Alun Michael has tabled the following Early Day Motion:

Separation of speculative and retail banking
That this House notes the enormous damage that the international banking crisis has done to jobs, businesses and public finances and to some of the world’s poorest people; recognises the substantial and continuing resources provided by taxpayers to support banks; acknowledges that an important part of this crisis was caused by a number of traditional deposit-taking retail banks becoming involved either directly or indirectly with speculative, casino-style, investment banking; welcomes the support of all political parties for continuing to provide a government guarantee for retail deposits held in banks; notes also that when banks are systemically important it is the taxpayer rather than the shareholder who carries the ultimate risk; supports much stronger regulation of banks to help prevent such a crisis in the future; recognises that, given constant financial innovation, regulation on its own will never be completely successful in always preventing massive losses on speculative casino-type investment banking; acknowledges that in a bank that combines speculative investment banking and traditional retail banking that massive losses on the speculative side would threaten its retail deposits thus necessitating taxpayers to rescue such a combined bank; therefore calls on the Government in its forthcoming banking legislation to separate speculative casino banking from traditional retail banking and, as well as leading by example, to encourage a similar approach internationally.”

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