Perhaps we all misheard, but didn’t John Redwood say the Conservative Party had supported stronger financial regulations prior to the global crisis of 2008, in a debate on Tuesday?
Now the Conservative Government is undoing the only such piece of useful regulation it has imposed in more than five years of government – a term in office founded partly on a promise to deal justice to those responsible for mismanaging the banks.
Perhaps Mr Redwood would like to explain the meaning of this?
Treasury moves to dilute a key part of the new regime intended to make top bank bosses more accountable will face scrutiny from a powerful committee of MPs next week.
In a move seen as a sign that the government is softening its stance toward the industry, the Treasury said that it was dropping a plan to “reverse the burden of proof” for managers, which would have forced them to demonstrate they had done the right thing if wrongdoing emerged on their watch.
As the Treasury announced that the regime would also be extended to other parts of the financial services industry, it said that senior managers would be subject instead to a “duty of responsibility” clause, requiring them only to take appropriate steps to prevent a regulatory breach.
The regime was one of the ideas from the parliamentary commission on banking standards, chaired by Conservative MP Andrew Tyrie and established in the wake of Barclays’ £290m fine in 2012 for rigging Libor.
Tyrie, who also chairs the Treasury select committee, said he hoped the move had not been a response to industry lobbying.
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