British banking chief outlines commitment to change and re-paying taxpayers who bailed out failures

In a letter to Treasury minister Lord Myners, BBA chief executive Angela Knight said the financial sector should never be a burden on society and was working constructively on regulatory changes to ensure the burden was shifted from the taxpayer back to the banking industry.
 
‘No institution should be regarded as too important to fail. The banking industry is engaged with Government and the regulatory authorities in a landmark reform programme, not only to avoid such problems occurring in future but also putting in place arrangements so that every bank has its own special recovery plan,’ she said.   
There is a need to balance these regulatory requirements, and the increased costs that result with the need to sustain lending, as the economy recovers, she explained.
 
‘The UK banking industry is at the table for change, but these are big changes and the cost is very significant. As we schedule these reforms we must ensure we balance the effects of cumulative change with the need to support the wider economy,’ she continued in the letter, a response to the Treasury's discussion paper Risk, Reward and Responsibility.
 
She also outlined the steps already being taken in the UK and abroad to strengthen the global banking system, including: measured increases in the capital which banks need to hold, which rise if they are seen to be taking on greater risk; recovery and resolution plans which would help banks to respond to future financial crises and ultimately unwind if necessary; and improved analysis of macro-economic risks and a wider range of regulatory tools to control them.
 
The letter also cautioned against increasing the burden on customers through imposing further taxes on financial transactions, explaining that the banking sector already raises a greater proportion of tax than any other business sector and customers already face a rise in the cost of financial services due to regulatory changes.