UK rejects Barack Obama's bank reforms

[FarCenter]

Lord Myners has ruled out Britain adopting President Barack Obama's radical banking reforms in what could amount to a fillip for the City of London.

By Louise Armitstead and Helia Ebrahimi - Published: 9:30PM GMT 22 Jan 2010

The City minister said he saw the President's proposals to break up the investment banks as solutions to "American issues" rather than "necessary actions" for the UK.

"President Obama came out with a solution to the idiosyncratic problems that he sees in the American banking system which is around investment banking in particular," he said. "It's worth remembering that proprietary trading, hedge funds, private equity, these were not at the heart of the difficulties that Northern Rock, or Royal Bank of Scotland or HBOS experienced."

Lord Myners added: "He's developing a solution to what he sees as the American issues, we've already taken the necessary action in the UK."

As banking shares dragged the FSTE 100 down 32 points to 5302.99, its lowest level this year, shadow chancellor George Osborne appeared to row back from his previous position backing Mr Obama.

Mr Osborne had suggested a Tory Government would introduce similar trading curbs for banks. However, on Friday he qualified his response saying: "We don't want to return to the crude Glass-Steagall separation of retail banking and investment banking."

Instead he argued that the Tories would still want to tackle the "riskiest end of investment banking.... when they're taking risks with the bank's own money".

Mr Osborne repeated the view that any changes needed to be part of an international agreement. Mr Obama's proposals, which need congressional approval, would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund. The proposed rules would also bar institutions from proprietary trading - investing to make a profit for themselves rather than on behalf of customers.

<SNIP>http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7056042/UK-rejects-Barack-Obamas-bank-reforms.html

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The "Daily Torygraph" should be the official Tory position.

[DJ13]

1. Did he wake up with a horses head beside him with a note from Goldman Sachs?

[FarCenter]

3. Depending on how you count, there are only about a dozen UK banks

Although there are a lot of other banks doing business in City of London.

They probably did their analysis of how Obama's proposal would impact them and came to the logical conclusion.

[DJ13]

9. A logical conclusion based solely on protecting profits

to the exclusion of returning fiscal soundness to the banking system.

[tabatha]

2. Apparently they support Obama's action in the US

but not in the UK, because they have already taken their own steps with the banks - which infuriated the banks.

[FarCenter]

5. Correct, the UK has already done some things, as have we

The Brits are never unhappy to see us screw ourselves.

Plus, they know the proposal will be unrecognizable once it gets through Congress.

[tabatha]

7. Pessimist.

[FarCenter]

8. Realist

[tabatha]

12. I like to give benefit of the doubt before something

happens. If it has not happened it is not real.

[FarCenter]

15. But you've seen Congress at work before?

The definition of insanity is doing the same thing over and over and expecting different results.

[tabatha]

16. I think people learn and grow.

And there are many in congress and the senate who are very worthwhile people.

It is the few that cause a problem.

I wish there were a way to get around them.

[BunkerHill24]

4. United Kingdom is prime for most corrupt financial system in the entire Western democracy

The entire banking system of Europe looks to trade/exchange dollars to England's Sterling, and they depends on the value of the Sterling for exchange to their Euro in futures. We need to reform the London markets in order to reform the European markets.

[FarCenter]

6. Right -- AIG Financial Products Group did all those derivatives in London

And the overnight lending freeze up was in the LIBOR market.

[Edweird]

10. The entire world can see that we are in no position to dictate what reforms other countries 'need'.

Maybe we should worry about our own sorry asses first.

[FarCenter]

11. Other countries are working to decouple from the US (e.g. France) or to gain leverage (e.g. China)

[BunkerHill24]

14. We can't ignore the world economy when our dollar is based on world's

trade/fuel/and politic. If it were that we didn't have mantle on world's economy, you would still be shopping at K-mart and and Jc Penny...and not buying cheap toys from Chinese dollar-store.

[galileoreloaded]

13. What a hoot!! RBS is the single scariest banking entity in the world,

and has the power to crush the US like a popcan. Sure, they're fine. Laughable.