TORY Treasury chief George Osborne yesterday moved to reassure bankers that his party had no plans to break up large banks.
Speaking at the World Economic Forum annual meeting in Davos, Osborne made it clear that the party had no intention of backing a return to the 1930s Glass-Steagall Act that at the time prevented commercial banks, which took deposits, from embarking on risky trading activities.
“I fully understand that modern universal banks need to offer their customers investment-banking services,” he said.
Osborne made it clear that a Conservative government would not seek to reimpose a strict division between investment and commercial banking, despite its support of US President Barack Obama’s plan to place limits on the size and activities of commercial banks.
Obama’s proposals would prevent banks from owning and investing in hedge funds and private equity firms and would limit the trading they do for their own accounts.