STOP RISHI SUNAK DEREGULATING THE BANKS

Prime Minister Rishi Sunak, Chancellor Jeremy Hunt, Financial Secretary to the Treasury Andrew Griffith

Stop Liz Truss deregulating the banks
Positive Money

We’re calling on the government not to water down laws put in place after the 2008 financial crash, explicitly designed to stop banks causing another crash. In the Financial Services and Markets Bill, there should be no statutory objective, not even a secondary one, for regulators to promote the growth of the finance industry or its ‘international competitiveness’.

Instead, we call for the following to be written into the new rules:

  • Abandon the dangerous proposal for an ‘international competitiveness’ objective.

  • Give regulators a new statutory objective to align the financial system with the legally binding 1.5 degree goals in the Paris Agreement.

  • Give regulators a responsibility to guarantee access to basic financial services for everyone, to help the millions of people who are currently excluded.

  • Abandon proposals to remove restraints on commodity markets, and take action to remove excessive speculation in the setting of food and energy prices.  

  • Clamp down on the unparalleled influence of big banks and financial firms over politicians, government and public institutions; including capping political party donations, and improving transparency rules for lobbyists’ meetings with ministers.

  • Introduce processes that give the public and civil society as big a say in how the financial sector works as financial industry lobbyists.

  • Maintain a cap on bankers’ bonuses, in order to tackle inequality and excess pay.


Background:

Right now, the UK is undertaking the biggest reforms to financial regulation in a generation. The Financial Services and Markets Bill will rewrite the rules that shape the way banks and financial firms operate. The government has called this “a once-in-a-lifetime opportunity” - but we think their plans to put ’competitiveness’ on the top of the agenda will only increase the power of banks and instigate a race to the bottom, and make regulators cheerleaders for banks and the financial industry, rather than watchdogs. A competitiveness objective would:

  • Increase the chances of another financial crash. A decade ago, UK Parliament said that a focus on competitiveness by regulators had contributed to the 2008 global financial crisis, which led to millions losing their savings, homes, and jobs.

  • Undermine levelling up. Prioritising the financial sector over other parts of the economy only benefits the ultra-wealthy in and around London at the expense of other communities. Instead we need to redirect money to where it’s needed most.

  • Undermine net-zero and risk more ‘greenwashing’ from banks.

  • Harm national security. Competitiveness would generate pressure to relax enforcement and policies, which will attract money from unethical sources from overseas, such as Russian oil.

In the same way, we urge you not to revoke or dilute the regulations placed on commodity markets following the 2008 financial crisis. Speculation is already playing a role in driving the cost of living crisis. Removing these position limits will encourage speculation, creating more volatile markets which serve neither the needs of the food and energy producers who need to use them, nor the customers who absorb the increased costs of these commodities.  

Instead, the Financial Services and Markets Bill should address inequalities between the city of London and the rest of the UK, align banks’ activities with the net-zero transition, ensure a secure financial system and basic financial services for all, and clamp down on the unparalleled influence of big banks over our politics and democracy.

We are part of the Finance For Our Future coalition - a coalition of activists, economists and think tanks who believe it is crucial that the UK seizes this opportunity to address the biggest challenges we face as a country today, such as the rising cost of living and climate chaos.


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To: Prime Minister Rishi Sunak, Chancellor Jeremy Hunt, Financial Secretary to the Treasury Andrew Griffith
From: [Your Name]

We’re calling on the government not to water down laws put in place after the 2008 financial crash, explicitly designed to stop banks causing another crash. In the Financial Services and Markets Bill, there should be no statutory objective, not even a secondary one, for regulators to promote the growth of the finance industry or its ‘international competitiveness’.

Instead, we call for the following to be written into the new rules:

Abandon the dangerous proposal for an ‘international competitiveness’ objective.

Give regulators a new statutory objective to align the financial system with the legally binding 1.5 degree goals in the Paris Agreement.

Give regulators a responsibility to guarantee access to basic financial services for everyone, to help the millions of people who are currently excluded.

Abandon proposals to remove restraints on commodity markets, and take action to remove excessive speculation in the setting of food and energy prices.

Clamp down on the unparalleled influence of big banks and financial firms over politicians, government and public institutions; including capping political party donations, and improving transparency rules for lobbyists’ meetings with ministers.

Introduce processes that give the public and civil society as big a say in how the financial sector works as financial industry lobbyists.

Maintain a cap on bankers’ bonuses, in order to tackle inequality and excess pay.

Background:

Right now, the UK is undertaking the biggest reforms to financial regulation in a generation. The Financial Services and Markets Bill will rewrite the rules that shape the way banks and financial firms operate. The government has called this “a once-in-a-lifetime opportunity” - but we think their plans to put ’competitiveness’ on the top of the agenda will only increase the power of banks and instigate a race to the bottom, and make regulators cheerleaders for banks and the financial industry, rather than watchdogs. A competitiveness objective would:

Increase the chances of another financial crash. A decade ago, UK Parliament said that a focus on competitiveness by regulators had contributed to the 2008 global financial crisis, which led to millions losing their savings, homes, and jobs.

Undermine levelling up. Prioritising the financial sector over other parts of the economy only benefits the ultra-wealthy in and around London at the expense of other communities. Instead we need to redirect money to where it’s needed most.

Undermine net-zero and risk more ‘greenwashing’ from banks.

Harm national security. Competitiveness would generate pressure to relax enforcement and policies, which will attract money from unethical sources from overseas, such as Russian oil.

In the same way, we urge you not to revoke or dilute the regulations placed on commodity markets following the 2008 financial crisis. Speculation is already playing a role in driving the cost of living crisis. Removing these position limits will encourage speculation, creating more volatile markets which serve neither the needs of the food and energy producers who need to use them, nor the customers who absorb the increased costs of these commodities.

Instead, the Financial Services and Markets Bill should address inequalities between the city of London and the rest of the UK, align banks’ activities with the net-zero transition, ensure a secure financial system and basic financial services for all, and clamp down on the unparalleled influence of big banks over our politics and democracy.