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Leading MPs today called on the Government to force investment banks to ber split from retail banks in its forthcoming legislation on banking regulation.
Former cabinet minister Alun Michael and Treasury Select Committee chairman John McFall have tabled an early day motion in the Commons calling for the separation of what it calls “speculative casino banking from traditional retail banking”.
The two MPs are part of the Christian Socialist Movement, a group of more than 40 Labour MPs and peers which includes Gordon Brown and Tony Blair. They believe that UK savers need greater protection from the threat of future losses through banks' investment banking arms.
“We are calling for action to stop banks gambling with our money,” said Michael.
McFall, whose committee forced many of the top bankers at the centre of the financial crisis to apologise publicly, said: “Regulation will never be 100% successful in preventing massive losses on speculative casino-type investment banking. So an ever present danger exists when banks combine casino banking with traditional retail deposits which are rightly guaranteed by the taxpayer.”
