Ed Miliband vows a 'reckoning' with the banks

Ed Miliband is promising a "reckoning" with the banks if Labour wins power, with the big five High Street giants forced to give up "significant" numbers of branches to make the industry more competitive.

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Miliband: Labour will be 'clear' over banking reforms

Ed Miliband has outlined Labour's plans to help convince the electorate that his party are the right people to fix the banking industry, after previously presiding over the global financial crisis.

Responding to a question from ITV News Political Correspondent Libby Weiner, he said: "By being clear about the mistakes that were made including on banking regulation...and by being clear about the future and what it looks like".

Miliband unveils plans to create 'competitive' banks

The Labour leader Ed Miliband has outlined plans which he says will build a banking system that "serves the real economy" if his party wins the next general election.

In a speech, he said: "We have to tackle a decades long problem in British banking: too much power concentrated in too few hands.

Labour leader Ed Miliband said "We need a reckoning with our banking system".

"On day one of the next Labour government, we will ask the Competition and Markets Authority to report within six months on how to create at least two new sizeable and competitive banks to challenge the existing high street banks.

He added: "We will establish for the first time a threshold for the market share any one bank can have of personal accounts and small business lending".

"Under a Labour government, you will no longer be serving the banks. The banks will be serving you", he said.

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Umunna: 'Not healthy' for Carney to enter political row

Shadow Business Secretary Chuka Umunna has said the Bank of England Governor should not be involved in big political matters after he said he did not support the view that a cap on banks' market share would improve competition.

Labour leader Ed Miliband is expected to pledge that he will refer high street banks to the competition authorities if his party wins the next general election in 2015, in a speech today.

Chuka Umunna said it was "not a good thing" for Mr Carney to comment on political issues

Mr Umunna said “I think it’s not healthy for us to involve governors of the Bank of England in big political debates and I don’t want to drag him into that", the Times reports.

He also suggested Mark Carney had only expressed his view after being asked a "leading question".

"He was asked a leading question by a Conservative MP who put it to him whether crude market caps on the share of a market that banks have are a good thing or not.

"We’re not proposing a crude or arbitrary market cap, we’re proposing something that would be set by the independent Competition and Markets Authority". he added.

CBI does not support Miliband's plan to split up banks

I don't support Ed Miliband's plan to split up the banks. We've got too many proposals from politicians for structural change.

Yes, let's have more competition on the high street. But a fixed number of bank branches per bank would lead to less consumer choice and service.

– CBI director general John Cridland, speaking to BBC Radio 4's Today Programme

Carney does not support cap on banks' market share

Ed Miliband is expected to pledge that he will refer high street banks to the competition authorities if Labour wins the next general election in 2015, in a speech today.

His stance contrasts with that of Bank of England governor Mark Carney who has said that a cap on banks' market share "would not result in substantial improvement to competition".

Bank of England governor Mark Carney does not agree with breaking up banks to improve competition. Credit: Press Association

Earlier this week, Mr Carney told the Commons Treasury Committee: "Just breaking up an institution doesn't necessarily create or enable a more intensive competitive structure."

Labour: Banking sector needs more 'competition'

Competition among global banks is good for small businesses and will provide better rates on loans taken out by small to medium enterprises, the shadow business secretary told Daybreak.

Chuka Umunna said there was "a large degree of consensus" on the need for more competition among multi-national banks like HSBC and Barclays.

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Financial services industry 'poor servant' to economy

Labour leader Ed Miliband will say that the financial services industry has "been an incredibly poor servant of the real economy" for years, when he delivers a keynote speech tomorrow at the University of London.

Of course, financial services are an important industry in itself. But for an industry that calls itself a 'service', it has been an incredibly poor servant of the real economy. Not just since 2010 - or 2008 - but for decades in this country.

We need a reckoning with our banking system, not for retribution, but for reform.

– Ed Miliband

Citing US laws which prevent any bank getting too big, Mr Miliband will also say:

If we carry on as we are, we will end up stuck with the same old banks dominating our high street: the old economy.

In America, by law, they have a test so that no bank can get too big and dominate the market. We will follow the same principle for Britain and establish for the first time a threshold for the market share any one bank can have of personal accounts and small business lending.

– Ed Miliband

Ed Miliband promises 'reckoning' with banks

Labour leader Ed Miliband has promised a "reckoning" with the banks if his party wins power at the next General Election, with the big five High Street giants forced to give up a "significant" amount of branches to make way for new competitors.

Labour leader Ed Miliband will give a keynote speech on the economy. Credit: PA

Mr Miliband will say that the financial services industry has been "an incredibly poor servant of the real economy" and will blame lack of competition in the sector for mis-selling scandals and a £56 billion drop in business lending since 2010.

In a keynote speech on the economy, Mr Miliband will pledge to introduce a legal maximum threshold for any bank's share of the market in personal accounts and small business lending.

If Labour win in 2015, they will introduce powers which would force the sale of branches and block mergers and acquisitions to prevent the threshold being breached.

The changes would be designed to improve the price and quality of lending to small businesses and services to individual customers, and to create at least two new "challenger" banks with significant shares of the market, said Labour.

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