Speculative Banking

EDM number 531 in 2009-10, proposed by Alun Michael on 05/01/2010.
Categorised under the topic of Financial institutions.

That this House notes the enormous damage that the international banking crisis has done to jobs, businesses and public finances and to some of the world's poorest people; recognises the substantial and continuing resources provided by taxpayers to support banks; acknowledges that an important part of this crisis was caused by a number of traditional deposit taking retail banks becoming involved either directly or indirectly with speculative, casino-style, investment banking; welcomes the support of all political parties for continuing to provide a government guarantee for retail deposits held in banks; further notes also that when banks are systemically important it is the taxpayer rather than the shareholder who carries the ultimate risk; supports much stronger regulation of banks to help prevent such a crisis in the future; further recognises that, given constant financial innovation, regulation on its own will never be completely successful in always preventing massive losses on speculative `casino-type' investment banking; further acknowledges that in a bank that combines speculative investment banking and traditional retail banking, massive losses on the speculative side would threaten its retail deposits thus necessitating taxpayers to rescue such a combined bank; and therefore calls on the Government in its forthcoming banking legislation to separate speculative casino banking from traditional retail banking and, as well as leading by example, to encourage a similar approach internationally.

This motion has been signed by a total of 98 MPs.