Booster seat for the Old Lady

THE post-crisis reforms of Britain’s financial system keep on coming. The latest from the Chancellor is a Bank of England bill which both strengthens its imperial role in the City and also puts in place new safeguards for the taxpayer.

if anyone needed any affirmation that Andrew Bailey and the Prudential Regulatory Authority have emerged as the stars of the current regime, it is provided by the latest refurbishment at the Bank, which strengthens the status of the PRA by converting it into the operating arm of a new Prudential Regulation Committee within the Bank.

it will now have similar status to the committees that set interest rates and preserve financial stability.

But with extended powers and responsibility comes extra oversight. Reform of the Court, the Bank’s board of directors, already is under way with a single unitary structure.

For the first time, however, the Bank will also face scrutiny by the National Audit Office in an effort to improve transparency. The importance of underpinning the internal structures of the Bank cannot be overstated given the significance of the City to the whole economy. New data collected by l obby group CityuK shows that in 2014 the City delivered a record trade surplus of £62bn for the nation.

if the professional services like accountancy are taken into account that figure climbs to £71bn.

All of this provides some insight into why some people in government want to bring an end to banker bashing.

The decision not to renew Martin Wheatley’s contract at the Financial Conduct Authority has been interpreted in some quarters as punishment for over-exuberant regulation. The truth is somewhat different.

For all his grandstanding, Wheatley’s style of regulation has been seen among the banks as stand-offish rather than intrusive. Wheatley himself would send lower level officials to brief bank directors whereas Bailey from the Bank makes a point of always attending such high level gatherings himself.

Getting decisions out of the FCA on vital issues, such as guidance on whether online mortgage applications should count as advice, has proved an uphill task.

Similarly, efforts by the banks to place a time limit on payment protection insurance pay- outs that have reached nearly £25bn also have fallen on stony ground.

Stunned by poor culture, from tax avoidance at HSBC’s Swiss branch to interest rate and foreign exchange fixing, the public thinks the banks deserve all the punishment they receive. That is why pressing on with reforms, including the ring fencing of retail or utility banking from investment banking, is so critical.

So it is significant that the Chancellor is making clear that he does not intend to roll-back what is a vital change. Ordinary consumers and small businesses, serviced by retail banks, should not have to pick up the bills when the casino banks make mistakes – as they inevitably do.

George Osborne is also right to push full steam ahead with the return of Royal Bank of Scotland to the public markets, even if this is at a loss to the taxpayer. RBS still faces some big disciplinary bills to pay, most notably for the sale of mortgage securities in the uS.

Settlements with American banks on this front have, in some cases, been in the billions, which is a huge uncertainty.

Nevertheless, with some order restored under chief executive Ross McEwan, and a political savvy chair in place in the shape of Sir Howard Davies, there is no reason why the taxpayer should come out of a sale process at a loss.

RBS has much still to do, including floating off the devolved Williams & Glyn’s branches and Citizens in the uS. Then it can rename itself NatWest.

unwinding the past among Britain’s financial regulators and the banks is a long and winding road.

But there is no excuse for easing the pressure for better banking.

Legal labyrinth

AMONG the best things the authorities could do to ensure that enforcement is effective is improve the way investigations are done.

The farce of the unpublished report into the near collapse of HBOS, and the role of three of main architects of the implosion, James Crosby, Andy Hornby and Lord Stevenson, goes on.

The lawyers have really got their teeth into this one and some 35 subjects and their lawyers have engaged in ‘Maxwellisation’, or the right of reply. They are now seeking a second – or in some cases even a third – look at the allegations made against them in the 500-page report. This borders on the farcical. The Government should publish and be damned.

Big tick

MARK Parker, the chief executive of Nike, is sprinting towards great riches. He has just been handed shares worth $30m, which he can collect, in addition to his other salary and benefits, if he runs the company for another five years.

The man who joined the sports emporium as a lowly shoe designer in 1979 has found his greatness.