SMALLER BANKS
9th April, 2009
The banking chaos over recent months has destabilised the entire economy.
It is now clear that we became too reliant and dependent on just one sector of the economy to provide economic growth, as UK banks grew to become global banks.
So for the future, we should move back towards having smaller banks. Smaller banks will take us back to days when bankers knew their customers and understood their businesses and could really help to get the finance flowing back into business again. It would separate too the business of banks lending to small low-risk consumers and businesses from the higher-risk international investment banking activities.
So, the Government should use its power as a major stakeholder in the banks to make sure changes are implemented, so when the economy recovers, they will be more manageable institutions.
This would significantly help to rebuild the trust between banks and customers which has been so severely damaged and provide the building blocks for a reformed banking sector based on responsibility and an understanding of the needs of their customers.