15th Jan 2015 06:44
LONDON (Alliance News) - A decision must be made early in the next Parliament about the timing of selling down the state's stake in Royal Bank of Scotland Group PLC, according to the UK's Chancellor of the Exchequer, George Osborne.
Although the government has been able to cut down its holding in Lloyds Banking Group PLC, another of the UK's banks that required state aid during the financial crisis, to less than 25% of its shares, it still retains about 80% of RBS. Osborne's comments demonstrate that policy on the banking system and its members remains a key area ahead of the UK's General Election in May.
Delivering a lecture on economic policy at the Royal Economic Society on Wednesday, Osborne said that the state is "close" to the point at which it can start getting taxpayers' money back by selling shares in RBS.
"Early in the next Parliament we will have to make a decision on the timing of any exit programme from RBS," Osborne said. "It is not good for taxpayer value or for the competitiveness of our banking system to have such a large and complex bank in state hands for too long."
The Chancellor also committed to introducing a new Bank of England Bill early in the next Parliament, in a show of support for the efforts of Mark Carney, the central bank's Governor, to strengthen governance and accountability at Threadneedle Street.
Osborne also warned that banks must take seriously plans to ring fence retail banks from investment, questioning the approach of some within the industry towards the new regulations.
"Some banks have thought strategically about this and got on with it; other banks are still reluctant to face up to the inevitable. Ring fencing retail banks from investment banks is a job that must be completed in the next Parliament," Osborne said.
By Samuel Agini; [email protected]; @samuelagini
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