Member

The third of the SIs—the one that the Minister focused on at the beginning—is on ring-fencing. I feel pretty strongly about this issue, having gone through the experience of listening for two years to our banks describing the actions that created the crises of 2007 and 2008. Among that evidence, one of the most important conclusions that we as a committee came to was that the lure of the free money from retail deposits, and the lure of putting that into risky investments, was irresistible to what some people call the “casino” side —the investment side—of banking. The Government and the regulator have already lifted the bankers’ bonus cap, and they have weakened the clawback for bonuses received on deals that go badly wrong. I start to worry when those two changes are combined with amendments that provide easier access to that so-called free money—the retail deposit money.