Steve Baker MP’s recent speech on his Private Member’s Bill to reform financial institutions is well worth a read. As a Private Member’s Bill it has almost no chance of coming into law, but may push the debate forwards.
You can read the full speech from Steve here, and selected highlights are below:
I believe profit is right and proper when earned through voluntary exchange without force or fraud. Bonuses based on just profits are a good thing. However, if some people gain but the costs of their actions are forced onto others through state power, that is an injustice. … In banking, a business which is categorically different from others, we must ensure that those who stand to gain also bear the risks of their own actions. … Hard working families and individuals, paying tax out of typically modest pay, must never again suffer the injustice of carrying the risks and consequences of risks taken in the pursuit of often enormous private returns. Risks must fall to those who take them in the pursuit of reward.
Steve then goes on to outline proposals to make bank directors personally liable for the failure of their own firms, so that the failure of RBS, for example, would have wiped out the personal wealth of
Sir Fred Goodwin. He ends with:
This Bill represents an opportunity to free the banking sector and the public from regulatory capture and lobbying. It could raise standards from the bottom up through the preservation and extension of commercial freedom and the development of professional, personal and mutual responsibility. …. It is time for us to say to bankers, “Put your money where your mouth is. By all means make a fortune but if you want the reward – bear the risks.”
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