Bank reforms 'protect taxpayer'

Measures to give savers extra security if a bank fails have been announced by the Government as part of major reforms for Britain's banking system.

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Osborne: Coalition 'acted swiftly' to reduce deficit

Chancellor George Osborne has said in a speech at Mansion House tonight that the UK economy had to "unavoidably be rebalanced" because of the recession:

The UK economy had tested the limits of an unsustainable and unbalanced model of debt-fuelled growth, and was badly in need of a difficult but unavoidable rebalancing.

This Coalition Government acted swiftly on taking office, set out a credible and steady plan to reduce our country’s record deficit, and created an independent Office for Budget Responsibility to monitor it.

The credibility of our strategy has been rewarded in the markets, and we are today benefitting from safe haven inflows despite our large deficit and huge banking system.

Chancellor: 'Competitive edge can't protect UK from financial storm'

The Chancellor has said tonight that his long-awaited White Paper on banking reforms that "no amount of competitive edge" could protect the country:

The Government has sought to keep the British economy safe in the storm, while sharpening our competitive edge for the future.

In the last year, while other Western financial centres have become less competitive, London has actually strengthened its position as number one in the global index.

Of course no amount of competitive edge can protect this country completely from the financial storm raging around us.

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Lord Mayor expresses appreciation at Chancellor's reforms

The Lord Mayor David Wootton expressed his appreciation at the Chancellor's reforms tonight at an annual Dinner to the Bankers and Merchants in London:

In challenging times in homes and workplaces around the country, and especially in Europe with economic and political challenges across the world.

Our greatest task is to find lasting solutions tackling economic imperatives and create a sustainable future for the benefit of all.

Bank says White Paper lacks detail

Banking giant KPMG said tonight they do not think the White Paper on reform gives any clear detail on how they will actually be affected.

Jon Pain, head of financial services risk at the bank, said the paper is "light on detail" and "short on recommendations" for growth.

Regulators have been handed significant discretion and it will now be left to them to decide how the reforms will be implemented. Until then uncertainty for banks will remain.

The paper is light on the issue of competition and whilst stressing the importance of striking the balance between stability and growth, is short on recommendations addressing the growth agenda.

The costs, estimated at between £4-7bn per year, are significant and when added to the wider reform costs are going to further depress banks’ profitability.

– Jon Pain, head of financial services risk at KPMG

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Federation of Small Businesses welcomes reform proposals

The Federation of Small Businesses has said they welcome the launch of the Banking Reform White Paper. They said the reforms must tackle the fact that the sector is "dominated by a few large players" who are still not giving small businesses the finance they need to grow.

The FSB has long said that the banking sector is dominated by a few large players and that stability in the sector will only come where there is more choice. We want to see the introduction of challenger banks a priority and so welcome the interest in the Lloyds branches from the Co-Op and NBNK and the sections in the paper on helping new entrants.

We know that small firms are finding it difficult to access the finance they need to grow and the recommendations to open up competition will begin to give firms a better deal.

We believe that a ringfence around the retail arms would also help small firms as the day-to-day operations of the banks which are crucial to them.

– John Walker, National Chairman, Federation of Small Businesses
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