No recanting from Turner on City reform
IN recent weeks Lord Turner has become the bête noire of the City. In conversation with Prospect magazine, the head of the Financial Services Authority suggested that some parts of the City may not be socially worthwhile. If anybody thought that last night’s Lord Mayor’s banquet would be an ideal opportunity for Turner to think again, they were wrong. “I will not be recanting,” he said.
He pressed on with his campaign to persuade financiers to reform urgently in order to prevent the near-death experience of the recent past from happening again – and again accused bankers of having “cooked up the crisis”.
He wants banks to hold more capital in the good times, which might mean bank investors having to settle for lower returns. He said the regulator – set for abolition if the Tories win the next election – will impose a more “assertive” style of supervision at a firm level. Extra capital would need to be put aside to cover transactions or investments in innovative financial instruments – even if that meant those markets would shrink as a result.
Turner called for bankers to do something that few in his audience would have considered prudent in these straitened times: walk away from profitable activities if they felt they might be socially useless.
Turner joked that heretics in the past used to be burned at Smithfield. But there was nothing to fear from last night’s audience, who (with the exception of an angry Ukip MEP) listened politely to a man whose views they must find increasingly uncomfortable.