Banking: Regulation

Baroness Kramer Excerpts

Thursday 11th July 2013 Lords Chamber

[Lord Pearson of Rannoch]

My Lords—

[Baroness Kramer]

My Lords, while it is absolutely true that—

[The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)]

Forgive me. If we could hear from the noble Lord, Lord Pearson, then we will hear from my noble friend Lady Kramer.

[Lord Newby]

My Lords, the basic assertion that the noble Lord makes, that the Government are unable to put in place a satisfactory regulatory framework for banks in the UK, is, frankly, simply not true. We have taken a wide range of measures to strengthen the regulatory structure and the provisions with regard to remuneration and capital, and in all those areas what we have done is compatible with what has been happening at EU level.

[Baroness Kramer]

My Lords, while many of us in this House will be working to strengthen banking regulation based on the commission’s report, and I was privileged to be part of that commission, is it not also true that what is remarkable from the evidence we received from the European Union is the common ground shared by the regulators, both in their definition of the issues and the areas in which they are seeking solutions? Is it not true that the key issue of dispute between the two is in fact whether or not there should be a cap on bankers’ bonuses—on which, ironically, the British public are with the EU?

[Lord Newby]

My noble friend is clearly right in that respect. The previous Government started a process with regard to remuneration for senior bankers, which has been strengthened in several respects. One of the more encouraging developments in recent years is that as a result of that—and as a result of public pressure—the level of bonuses at RBS has fallen by 70% between 2010 and 1012, and at Barclays by 40%.