Cable would carve up rescued lenders

AS Tory shadow chancellor George Osborne was laying out his blueprint for regulatory reform, Liberal Democrat counterpart Vince Cable was proposing his own solutions to the financial crisis, including the break-up of Royal Bank of Scotland and Lloyds Banking Group.<br /><br />Speaking at the London Stock Exchange, Cable said: &ldquo;The Lloyds-HBOS merger should be unscrambled &hellip; and RBS should also be split with its investment banking operations floated off&rdquo;.<br /><br />&ldquo;The banks are going to have to be split. It shouldn&rsquo;t happen overnight, in a depressed environment, but it&rsquo;s going to have to happen,&rdquo; he said.<br />&ldquo;The large, failed, British banks are the financial equivalent of Chernobyl,&rdquo; he added.<br /><br />He said banks should be required to publish details of their highest earners, rather than just directors, while the most well-paid bankers should be forced to confirm that they are domiciled in the UK for tax purposes.<br /><br />Cable envisages a long-term role for state banking rather than a quick sale of state-owned banks and also called for the &ldquo;woefully misconceived&rdquo; Asset Protection Scheme &ndash; which insures banks against toxic assets &ndash; to be scrapped.<br /><br />Unlike Osborne, Cable believes the FSA should remain as a unitary regulator, labelling Tory plans to abolish the FSA &ldquo;disruptive&rdquo;.