Last Friday, the debate on UK bank reform burst into life, after Ed Miliband boomed that British banks have been “an incredibly poor servant of the real economy”. Labour, the party’s youthful leader told us, will “turn the tide”.
The UK’s five largest banks are “too powerful” and should be forced to give up “significant numbers” of branches, said Mililand. He’s right, given that the big-five still hold 85pc of personal accounts. “On day one” of the next Labour government, Miliband promised, steps would be taken to create two new “Challenger” banks to take on the existing “big five” and boost competition on the High Street.
“Nothing is safe that does not show it can bear discussion and publicity”. These words, among the many pearls uttered by the celebrated 19th century historian Lord Acton, have often come to me in recent years, as the sub-prime crisis has unfolded. They’ve been particularly on my mind over the last week or so, as I’ve watched events in the eurozone.
Investor sentiment in Western Europe appears to have improved over the last few days. In the aftermath of last weekend’s French sovereign downgrade, financial markets have staged a counter-intuitive rally, with European equities reaching a five-month high on Thursday. At the same time, and perhaps even more surprisingly, France and Spain between them off-loaded no less than €14.6bn of government paper last week, at relatively favourable borrowing costs.