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Osborne warns of break up of British banks

The proposed ring fence move would create “uncertainty for investors”, says the British Bankers’ Association.

George Osborne is set to announce that the British banks will be broken up if they do not comply fully with new rules.

The British Chancellor of the Exchequer agreed that the new banking reform bill will set up a ring fence to protect retail banking from riskier investment banking operations, apart from protecting the taxpayer from banking collapses.

Meanwhile, the British Bankers’ Association said the proposed ring fence move would create “uncertainty for investors” while leaving banks with less money to finance businesses. On the other side, Labour party argued that the chancellor and business secretary Vince Cable do not want to leave the threat of full separation hanging over banks.

Insisting that he has always been open to suggestions on making safer banking system, Osborne will accept that majority of them at Westminster do not trust the banks and think they will try to find ways of undermining any ring fence.

According to the Financial Times, Osborne will say: “My message to the banks is clear: if a bank flouts the rules, the regulator and the Treasury will have the power to break it up altogether – full separation, not just a ring fence.”

A cross-party parliamentary banking commission headed by Andrew Tyrie, and members including Lord Lawson and Justin Welby recommended the “sword of Damocles” approach in December 2012.

Osborne is not proposing a more general power to apply full separation across the banking industry, he, however, will only give regulators the power to dismantle an individual bank which tries to undermine the ring fence.

Refusing Tyrie’s committee call for tougher leverage rules for banks, the chancellor is interested to stick to the internationally agreed leverage ratio of 33 to 1.

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No, David Cameron’s speech was not “left wing”

Come on, guys.

There is a strange journalistic phenomenon that occurs when a party leader makes a speech. It is a blend of groupthink, relief, utter certainty, and online backslapping. It happened particularly quickly after David Cameron’s speech to Tory party conference today. A few pundits decided that – because he mentioned, like, diversity and social mobility – this was a centre-left speech. A leftwing speech, even. Or at least a clear grab for the liberal centre ground. And so that’s what everyone now believes. The analysis is decided. The commentary is written. Thank God for that.

Really? It’s quite easy, even as one of those nasty, wicked Tories, to mention that you actually don’t much like racism, and point out that you’d quite like poor children to get jobs, without moving onto Labour's "territory". Which normal person is in favour of discriminating against someone on the basis of race, or blocking opportunity on the basis of class? Of course he’s against that. He’s a politician operating in a liberal democracy. And this isn’t Ukip conference.

Looking at the whole package, it was actually quite a rightwing speech. It was a paean to defence – championing drones, protecting Britain from the evils of the world, and getting all excited about “launching the biggest aircraft carriers in our history”.

It was a festival of flagwaving guff about the British “character”, a celebration of shoehorning our history chronologically onto the curriculum, looking towards a “Greater Britain”, asking for more “national pride”. There was even a Bake Off pun.

He also deployed the illiberal device of inculcating a divide-and-rule fear of the “shadow of extremism – hanging over every single one of us”, informing us that children in UK madrassas are having their “heads filled with poison and their hearts filled with hate”, and saying Britain shouldn’t be “overwhelmed” with refugees, before quickly changing the subject to ousting Assad. How unashamedly centrist, of you, Mr Prime Minister.

Benefit cuts and a reduction of tax credits will mean the Prime Minister’s enthusiasm for “equality of opportunity, as opposed to equality of outcome” will be just that – with the outcome pretty bleak for those who end up losing any opportunity that comes with state support. And his excitement about diversity in his cabinet rings a little hollow the day following a tubthumping anti-immigration speech from his Home Secretary.

If this year's Tory conference wins the party votes, it’ll be because of its conservative commitment – not lefty love bombing.

Anoosh Chakelian is deputy web editor at the New Statesman.