LONDON Nov 22 Banks lobbying against
tougher rules are short-sighted, intellectually dishonest and
risk sparking more reforms, a Bank of England policymaker said
Robert Jenkins, a member of the Bank's Financial Policy
Committee, said the banks' latest lobby tactic was to "convince
pundits, public and politicians" that pushing for bigger bank
capital buffers too soon would hit the economy hard.
Such a lobbying strategy was intellectually dishonest and
potentially damaging, Jenkins said.
Banks could beef up capital by cutting bonuses, by
curtailing risk-taking between lenders and raising term debt and
equity, Jenkins said.
"Bank lobbies are winning the battles and losing the war. As
for bank leaders, they need to lobby less and lead a lot more,"
Jenkins said in a speech made available to the media.
Past tactics such as persuading regulators to delay the full
impact of tougher global bank capital rules until 2019 proved to
be a fleeting victory as markets put pressure on lenders to
speed up recapitalisation, Jenkins said.
The latest tactic of raising fears that the real economy
will be starved of funds exploit "misunderstanding and fear".
"For in pursuing its short-sighted approach, the banking
lobby is unwittingly making the case for more intervention in an
industry which refuses to reform," Jenkins said.
Jenkins said his "lesson for lobbyists" came from someone
who was himself a former lobbyist as past chairman of the
Investment Management Association.
The FPC is tasked with spotting broader, system-wide risks
and taking action before they destabilise markets.
Its next set of recommendations is due at the start of
December after it has considered the Bank's survey of market
participants released on Tuesday, which identified a possible
break-up of the euro zone as the top threat.