By Tim Castle and Matt Falloon
SHEFFIELD, England, March 12 Aggressive lobbying
will not compromise decisions on banking sector reform, British
business minister Vince Cable told Reuters on Saturday, warning
that policymakers had to deal with the "too big to fail" issue.
Britain's Conservative-Liberal Democrat coalition government
has asked an independent banking commission to look into how to
reform banks to protect the taxpayer and the economy from any
future financial crises.
At the heart of the review, the final findings of which are
due later this year, will be an assessment of whether banks
should be forced to separate their retail and investment
operations. An interim report is expected in April.
"I'm pretty confident that we've got a very robust, strong
process that will not be deflected by lobbying," Cable said in
an interview at the Liberal Democrat spring conference in the
northern English city of Sheffield.
"I'm pretty confident that there will be recommendations
that the government will feel able to act on because it's
produced with a high level of authority."
Banks have warned the government that too harsh an approach
could harm London's position as a financial hub.
There has been some speculation that an agreement between
the government and bankers -- the so-called Merlin deal -- over
lending, bonuses and tax earlier this year could lead to a
watered-down reform package.
Cable said there has already been "a lot of lobbying in the
background to try to compromise the banking commission" and that
there was no "automatic link" between the commission's possible
recommendations and future government policy.
However, he said neither the Merlin agreement nor lobbying
would influence ministerial decisions.
"Given the Chancellor (finance minister George Osborne) and
I set it up in the first place and appointed very authoritative
people to it, it would be difficult to envisage circumstances in
which the government would ignore its findings."
Cable supported the view of Bank of England Governor Mervyn
King over banking reform, warning that "we have to get to grips
with the 'too big to fail' problem".
(Editing by Hugh Lawson)
((UK bureau, firstname.lastname@example.org, Tel: +44 207 542 7947))
Keywords: BRITAIN POLITICS/CABLE
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