British opposition Conservative party Shadow Chancellor of the Exchequer, George Osborne, delivered his address to delegates at the Institute of Directors Annual Convention in London on April 28, 2010.
George Osborne, the Conservatives' candidate to become Chancellor of the Exchequer, has been reaching out to top U.K. bankers to assure them that, despite the party's populist rhetoric, a Conservative government won't declare war on banks, according to people who have heard his pitch.
To be sure, all three major parties have had to walk a fine line with the U.K.'s powerful financial community during this intensely tight campaign, which culminates in national elections on Thursday.
While the Labour party has decried excessive banker bonuses, it also had to oversee such payouts for employees of state-owned Royal Bank of Scotland Group PLC. Moreover, Labour has long enjoyed a chummy relationship with the City of London and championed the now derided "light-touch" regulatory approach.
The Liberal Democrats, perhaps the most vocal critic of London's financial community, have at least three "shadow ministers" who worked in the banking industry and received funding from the heads of large London hedge funds.
But the Tories have historically had a tighter relationship with the City of London than the other major parties, and that is seen as a potential vulnerability in an election where bankers have become the bad guys.
Thus, the Conservatives have sought to establish their populist bona fides with strong words. In Thursday's televised debate, Tory leader David Cameron assailed "appalling bonuses" and blasted Labour for being too cozy with the financial industry. "They did very much hitch the whole fortunes of the economy to the City of London," Mr. Cameron said.
Given the potency of the rhetoric, Mr. Osborne lately has tried to mend fences with bankers after lambasting them in public, according to people familiar with the matter. In a televised debate last month, for example, Mr. Osborne lashed out at Barclays PLC President Bob Diamond.
"It really beggars belief that two years after we all bailed them out, we get the Barclays Bank chief paying himself £63 million," Mr. Osborne said.
When Barclays officials called Mr. Osborne's office to complain that the £63 million figure was inaccurate, Mr. Osborne relayed an apology to Barclays, according to people familiar with the matter.
A person familiar with Tory thinking said Mr. Osborne is being consistent with his public and private remarks.
All the same, people in the City say Mr. Osborne's quiet outreach efforts have been frequent. For instance, in phone conversations and private meetings, senior banking executives say Mr. Osborne has tried to allay their concerns that a Tory government would try to force giant banks to shed their investment banking and trading divisions.
Mr. Osborne's assurances come even as the Conservatives publicly back international rules that would restrict risky banking activities. Mr. Cameron reiterated Thursday that retail banks "should not be behaving like casinos" and endorsed the Obama administration's proposal to separate proprietary trading from traditional banks. Such rules could force major U.K. banks to rein in or divest their investment-banking divisions.
Last October, the Bank of England's governor, Mervyn King, delivered a speech in which he advocated separating high-risk activities from retail banking. Mr. Osborne applauded the remarks as "powerful and persuasive."
Further aligning the Conservatives with Mr. King, the party's platform calls for the Bank of England to gain control over supervising the U.K. banking industry, a duty now held by the Financial Services Authority.
The Conservatives' tough talk has alienated some traditional supporters. Last year, for example, Jon Moulton, a private equity fund manager and former Conservative donor, said that while a degree of "banker bashing" was justified, the Tory attack is "merely opportunistic" and could damage the City's long-term prospects.
When bankers have phoned Mr. Osborne to seek clarification about his views on splitting banks' retail and trading businesses, people familiar with the matter say he has tried to ease their concerns and said the Conservatives have no intention of breaking up giant banks.
"They've said, 'We've got an election to win. Things will be said in the heat of an election. We believe it's a good thing for the economy that we have strong, profitable banks','' said a person who has heard Mr. Osborne's private remarks.
The person familiar with the Tories' thinking stressed that the Tories have never advocated a wholesale breakup of big banks.
Mr. Osborne also has sought to quell concerns that Mr. King's support for forcing banks to shrink—an unpopular stance among much of London's financial community—would become official Bank of England policy, according to people familiar with the matter. Mr. Osborne recently has been telling senior banking executives that Mr. King wouldn't be responsible for banking supervision in a Conservative government, these people said.
The person from the Tory camp said such comments about Mr. King are consistent with the party's official position on financial regulation. A July 2009 Conservative "white paper" proposes restructuring the Bank of England so that it takes "a collegiate approach" to overseeing financial stability, which will "reduce the institutional reliance on the position of governor." A Bank of England spokesman declined comment.
Murdoch takes a different stance in the US
No comments:
Post a Comment