Good news from the City is something to cherish at the moment, and today RBS has confirmed that it will be withdrawing from the Asset Protection Scheme, through which the government gave the bank insurance cover against losses on its £282 billion toxic assets. Those assets have now fallen 63 per cent to £105 billion. This is good news in the ‘cesspit’, as Vince Cable called the City of London, because it marks the first step towards the bank returning to the private sector.
One man determined to turn the focus away from the latest scandal to crawl out of the cesspit and towards a recovering City is new City Minister Greg Clark. He has given an interview to the Financial Times about his new job in the Treasury, which he took in September’s reshuffle. Clark is clearly concerned about the reputation of the City, saying:
‘I feel particularly angry about the unjustified damage done to the reputation of ordinary people who work in the sector.’
Those causing this damage should be cast out of the City, Clark argues:
‘If people have been implicated in scandals for which they have been responsible or if senior people think they have inherited people who don’t get the importance of restoring the reputation of their sector, certainly they should move out.’
This new minister is clearly well aware of the dangers of complacency in the banks: as we’ve warned repeatedly on Coffee House, the risk to London as a top financial centre grows with every new scandal. He says he does see ‘encouraging signs’ of bankers realising how serious the current situation is. They may get another reminder today: the Parliamentary Commission on Banking Standards is taking evidence from former chairman of the Federal Reserve Paul Volcker, who will share his own experiences of regulatory reform in the United States.