Great news reading the coalition agreements on banking reform:
The parties agree that reform to the banking system is essential to avoid a repeat of Labour’s financial crisis, to promote a competitive economy, to sustain the recovery and to protect and sustain jobs. We agree that a banking levy will be introduced...We agree to bring forward detailed proposals for robust action to tackle unacceptable bonuses in the financial services sector; in developing these proposals, we will ensure they are effective in reducing risk.
We agree to bring forward detailed proposals to foster diversity, promote mutuals and create a more competitive banking industry.
So a levy on the banks to help pay for the mess Labour allowed, a crackdown on the banking bonus culture and in particular a move to promote mutuals. I wonder why Labour couldn't do this already?
I banged on during the campaign on how we needed to get credit flowing to Small businesses. The coalition agreement thankfully talks about this too:
We agree that ensuring the flow of credit to viable SMEs is essential for supporting growth and should be a core priority for a new government, and we will work together to develop effective proposals to do so. This will include consideration of both a major loan guarantee scheme and the use of net lending targets for the nationalised banks.
So not just words, the presence of net lending targets and loan guarantees is a very welcome detail. Vince Cable, the new Business secretary, will do a much better job than the lord of darkness, Peter Mandelson, did on this. It will be a revelation for the Business department to have someone who actually is trained in economics running the department!