Coalition too soft on banks

September 19, 2011, 4:50 PM GMT+0

The majority of Britons does not think that the Government’s handling of the banks following the banking crisis has been tough enough, our poll shows. Results show a largely united public front against the perceived ‘soft’ banking regulation administered by the Government and have over half of the population in favour of the proposed separation of retail and investment banking wings. The results come as the Independent Banking Commission recommends a formal separation between the retail and investment divisions of Britain’s banks.

  • 77% of British people think the Government has been too soft with banks
  • Just 2% think the Government has been too harsh, while only 10% believe it has got the balance right
  • A significant 81% think that banks have not reformed the bonus culture, a heavily cited cause for the banking crisis, while only 3% think banks have tackled the issue
  • 63% of the public think banks have not reformed their practises or reduced risks, compared to just 14% who think that they have
  • 59% support the suggestion of the separation of the retail and investment banking divisions within big banks, although 31% aren’t sure of their opinion of this idea

With the widespread effects of the recent financial crisis continuing to impact the economy, as well as Britons’ daily lives, little appears to have changed in the public’s eyes when it comes to banking practises, amid reports of large bonuses being handed out again this year.

Outgoing chairman of Lloyd's Insurance, Lord Levene, recently commented: ‘the banks are a very important part of the economy, and if they don't have the trust of the public it's not going to work’. But with 4 out of 5 people taking the stance that banks have neither been adequately punished for their role in the crisis nor are reforming their more unjust practices, there looks to be a lot of work set to do to restore both the image of the Government and of the banks.

An ‘assault on banks’?

Despite its heralding by the Commission as the solution to many of the nation’s banking problems, our results show that the population is undecided over the suggestion to divide the retail and investment sides of the country’s major banks. Many simply don’t know if doing this will help.

The report, released this week, has outlined plans on this, much to the opposition of banking heads. This comes despite strong Lib Dem and Conservative avocation of the policy.

Head of the British Banking Association, Angela Knight, said: ‘The emphasis at the moment should be on economic recovery rather than another assault on the banks.’