Bank's Jenkins - bank lobbying against tougher rules "dishonest"

LONDON Wed Nov 23, 2011 9:16am GMT

The Bank of England is seen against a blue sky in the City of London October 6, 2011.. REUTERS/Suzanne Plunkett

The Bank of England is seen against a blue sky in the City of London October 6, 2011..

Credit: Reuters/Suzanne Plunkett

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LONDON (Reuters) - Banks lobbying against tougher rules are short-sighted, intellectually dishonest and risk sparking more reforms, a Bank of England policymaker said on Tuesday.

Robert Jenkins, a member of the Bank's Financial Policy Committee, said the banks' latest lobby tactic was to "convince pundits, public and politicians" that pushing for bigger bank capital buffers too soon would hit the economy hard.

Such a lobbying strategy was intellectually dishonest and potentially damaging, Jenkins said.

Banks could beef up capital by cutting bonuses, by curtailing risk-taking between lenders and raising term debt and equity, Jenkins said.

"Bank lobbies are winning the battles and losing the war. As for bank leaders, they need to lobby less and lead a lot more," Jenkins said in a speech made available to the media.

Past tactics such as persuading regulators to delay the full impact of tougher global bank capital rules until 2019 proved to be a fleeting victory as markets put pressure on lenders to speed up recapitalisation, Jenkins said.

The latest tactic of raising fears that the real economy will be starved of funds exploit "misunderstanding and fear".

"For in pursuing its short-sighted approach, the banking lobby is unwittingly making the case for more intervention in an industry which refuses to reform," Jenkins said.

Jenkins said his "lesson for lobbyists" came from someone who was himself a former lobbyist as past chairman of the Investment Management Association.

The FPC is tasked with spotting broader, system-wide risks and taking action before they destabilise markets.

Its next set of recommendations is due at the start of December after it has considered the Bank's survey of market participants released on Tuesday, which identified a possible break-up of the euro zone as the top threat.

(Reporting by Huw Jones; Editing by John Stonestreet)

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Comments (2)
About-Face wrote:
Why are the Bankers deemed intellectually dishonest in their lobby, Mr Jenkins?
For too long and too frequent, it is the politicians that were lacking in intellectual capital.
Politicians fear the bankers and there aren’t that many Lord Denning that has that capacity of intellect and humility to step up.

Nov 22, 2011 4:27am GMT  --  Report as abuse
dunx1000 wrote:
just nationalise the banks fire anyone on a high salary and refloat them in a couple of years job done!

Nov 23, 2011 5:23am GMT  --  Report as abuse
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