Ed Miliband seeks banker disciplinary code

Ed Miliband Nobody has paid the price for the financial crisis, Ed Miliband says

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Labour leader Ed Miliband has given his backing to suggestions that bankers should face being struck off if they are deemed unfit to do the job.

He told the Sunday Times that the banking industry should "take some responsibility" by stopping wrongdoers.

Striking off bankers in the same way as doctors can be was proposed last year by a cross-party commission.

Mr Miliband said: "Nobody has paid the price for [the financial crisis] - that is what really angers people."

An independent banking report, to be published on Monday, is likely to call for banks to split retail operations from their riskier investment activity to help try to prevent a repeat of the economic crisis.

But the Labour leader called for more action, even if such a step was taken.

'Take responsibility'

He said: "Bankers say the era of remorse is over, but that's not good enough. I just don't think anything has really changed.

"There is a sense they just don't get it. This is nothing to do with the politics of envy. It is to do with the sense of real destruction caused by bankers, for which other people paid the price."

To trade financial products such as currencies or derivatives in the UK, you need an FSA licence.

That requires a background check and thorough interview with the City watchdog.

The higher up the food chain you are the more intensive the checks and the longer the interview will be.

In saying bankers should be struck off if they do wrong, Ed Miliband is, in effect, calling for something that has been the practice for a few years.

Not only would a City worker be banned from trading if found guilty of illegal behaviour, they'd also face a fine and/or jail time.

Labour also called for two other major changes in the banking sector: Greater transparency on pay and bonuses as well as more competition in the industry.

The G20, the Coalition and the Bank of England could all legitimately claim that both these issues are also being dealt with in some form or another.

Calling for the creation of a disciplinary code similar to that observed by doctors and lawyers, he went on: "I think the industry should take some responsibility, and strike people off who do the wrong thing."

The idea for striking off bad bankers was put forward in June last year by the cross-party Future of Banking Commission, which included Business Secretary Vince Cable.

Meanwhile, the Trades Union Congress (TUC), which is meeting in London this week, has urged the government to stand up to banks and follow through with proposed changes to the banking system.

TUC general secretary Brendan Barber is set to tell delegates on the opening day of a three-day conference that recommendations by the Independent Commission on Banking, chaired by Sir John Vickers, should be defended against attacks by the banks.

In a speech to the Congress, he is expected say: "The Vickers team have been asked how to make the banks safe, but the real question is how we make them useful.

"Tougher capital requirements and ring-fencing will be bitterly opposed by the banks, who will now lobby hard to water them down. They should be resisted."

Business Secretary Vince Cable warned the banking industry to prepare for sweeping reforms so they could never again use "the deposits of British savers to play the banking equivalent of the roulette wheel".

Writing in The Mail on Sunday, he criticised institutions which continue to award top staff "lavish remuneration packages".

Mr Cable said: "Banks must be left under no illusions that reform is coming.

"The recession is not an excuse for postponing banking reform. Indeed our economic recovery depends on it."

Chief Secretary to the Treasury and fellow Lib Dem cabinet member Danny Alexander later dismissed reports Mr Cable would quit if the government delayed implementing Sir John's recommendations.

He told Sky News he had spoken to the business secretary and the claims were "total nonsense".

Mr Alexander added: "The important thing here is to get on with the job of sorting out our banking system."


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  • rate this

    Comment number 40.

    Perhaps there should be no Government backed guarantee of banks' debts or personal savings. Let businesses fail, let people lose their money. Yes, the immediate pain is greater, but long term recovery is swifter and those who save with banks, might look more carefully at their investments in future?

  • rate this

    Comment number 39.

    What an excellent idea, at last the man seems to be thinking. Why stop at bankers though? Why not licence more so-called professions? Journalists and newspaper editors spring to mind too. No licence, no work, simple. Boxing is better controlled than banking or journalism!

  • rate this

    Comment number 37.

    As a medical doctor, my decisions are based on the consequences of making a poor decision which can be disasterous for my career. This drives doctors to think carefully before you act. We are increasing taught about medico-legal issues. Why shouldn't these casino bankers face the same the consequences - they run this country. Infact I can be jailed for extremley poor decisions - why can't they?

  • rate this

    Comment number 35.

    Struck of from what? Will it mean you cannot work in a bank at all, even behind the counter. What will they be guilty of, trying to maximise the Banks profits?
    This is more political grandstanding banging on about a possibly popularist proposal that has not been thought through

  • rate this

    Comment number 28.

    so Mr Miliband says no-one has paid the price for the financial crisis? well how about we start with the ineffectual last government who seem to have walked away without shouldering their share of the blame-gordon brown and his cronies? the "blame it on the bankers" excuse is getting as old and tired as the "blame it on the thatcher years" excuse that labour keep repeating.


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