HSBC chairman Douglas Flint calls for delaying UK's new rules for banking industry
04 August 2014
HSBC chairman Douglas Flint has called on the UK government to go slow on introduction of new rules aimed at making the banking industry less vulnerable to crises.
The Guardian reported that Flint is asking the government not to force compliance with new rules for banks that require them to "ringfence" their high street businesses from their casino investment banking arms even as the industry undergoes a competition investigation.
The chairman of the UK's biggest bank, which was slated to publish its first half results showing a drop in profits on Monday, had written to Chancellor George Osborne and senior regulators to make his views known.
The ringfencing requirements form a key element of the reform ideas drawn up by the independent commission on banking, chaired by Sir John Vickers in 2011 after it was set up by the present coalition.
HSBC, which would not comment on the report by Sky News had been concerned that the reorganisation this would require by 2019 was taking place at the same time the Competition and Markets Authority conducted an investigation into the industry which could also require and lead to structural changes.
Sky News reported a political insider as saying that HSBC was not challenging a recent announcement by the Competition and Markets Authority (CMA) disclosing that it was reminded to move ahead with a full inquiry into the personal current account and small business (SME) banking markets.
The bank, however is said to have expressed concerns that the CMA could call for structural reforms requiring the disposal of operations on which it was already spending significant sums in preparation for the introduction of ring-fencing.
The demand for a delay to the ring-fencing deadline until the outcome of a competition probe was made available, represented the most robust recent intervention by a major bank over one of the UK's key post-crisis reforms to the industry.
Legislation for the enactment of ring-fencing structure had already been passed under the Banking Reform Act, but it was not clear whether politicians or regulators would be inclined to accede to HSBC's request.