George Osborne: Change the City can believe in

In 2009 George Osborne said:

The fact that people in the City give us money, even though we are promising tougher regulation, is a sign that many people in the City understand that there needs to be change.

Osborne once sold himself as the Chancellor who would be progressive and tough on banks, carry out well needed reform, and still walk away with votes from the city, because he was decisive, on top of things, and they recognised the need and public thirst for change.

So what, 2 years on, was the change the bankers could believe in?

Britain’s biggest banks are to be given until 2019 – longer than had been expected – to implement radical reform of their operations to prevent another taxpayer bailout of the system.

Of course, George Osborne welcomed Sir John Vickers’ findings, or what the Independent Commission on Banking have admitted were “deliberately composed of moderate elements” – but, given the almost universal agreement that high street and speculative arms of banking should be separated (apart from Bob Diamond and a few others), one wonders why the ICB stopped short of a recommendation for a full break-up, plumping only for a ring fencing of the two activities.

(On the subject of Bob Diamond, he met with the Chancellor on the 1st of this month to request he delay banking reforms, possibly repeating previous threats that he’ll take Barclays and leave the UK. Just saying).

As an Independent leader article put it: “ring-fencing still leaves open the possibility of banks stealthily dismantling the internal demarcation over time.”

I guess with (not so) tough measures like this, it’s obvious why big shots in the city are bankrolling Osborne – they want a man who can get things done for them.