Downing Street Says » Financial Services Authority Report

» Monday, October 19, 2009

Financial Services Authority Report

Asked if the Prime Minister thought that restricting the flow of loans and mortgages was more important than getting banks to lend money to small businesses, the Prime Minister s Spokesman (PMS) said that the Financial Services Authority (FSA) report published today brought up a number of issues about mortgage lending, including the issue of self-certification, which needed to be sorted out. In terms of the second issue regarding lending to small and growing businesses there was a lending panel involving the Chancellor, Lord Myners and Lord Mandelson, which met regularly with banks. It was extremely important that the banks continued to lend to growing businesses and the Government was intent on making sure that happened. It was also important that some of the things we had seen in the mortgage industry that had led to people getting themselves into financial difficulties were sorted out. The issue of credit cards also needed to be looked at.

Asked if the Prime Minister thought that the FSA s restrictions on bank bonuses were good enough, the PMS said that the FSA conditions would come into effect from January 1st 2010 and the Chancellor had met with both UK and international banks to discuss this. The Walker review was also coming up, which would strengthen the position in relation to the wider questions about remuneration, governance and board supervision. The combination of the FSA, the banks having signed up to what had been asked of them post-G20 and the Walker review should put in place a robust framework. It was for the banks to make sure that they were in a position to do what they had promised.

Asked what the Prime Minister felt about a windfall tax on the banks, the PMS said that there had been some speculation over the weekend about a windfall tax and any decision about taxation that affected the industrial economic sector was a matter for the Chancellor at the right moment.

Asked about the timing of the Pre Budget Report, the PMS said that there was no further information at this stage.

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