British Financial Regulator Takes On Banks

By LANDON THOMAS Jr.
NYT

LONDON — “Crackers.” “Insulting.” “Stupid.”

Those epithets and more have been hurled at Adair Turner, the blue-blooded scold of City of London, Europe’s Wall Street.

But after the financial debacles of the past year, Mr. Turner, Britain’s chief financial regulator, refuses to back down. He insists on posing some uncomfortable questions for London financiers — and he is raising a bit of a ruckus in the process.

Mr. Turner is daring to ask the very question that many Britons, and indeed, many Americans, are asking themselves: What good are banks if all they do is push money around and enrich themselves? As he sees it, the City takes too much from British society and gives back too little. It has grown too big and too powerful. And, he contends, the bankers have co-opted many of the regulators who watch over them.

So Mr. Turner is proposing a few changes, none of which would make the bankers very happy. Tax financial transactions. Increase capital requirements. Shrink the financial industry, which, at its peak, accounted for roughly 11 percent of the British economy. Only then, he argues, can banks’ excessive profits — and bankers’ pay — be curtailed.

(Original here.)