Fundamental problem

9 March 2010 By Chris Hughes

UK financial services secretary Paul Myners says market participants should start behaving like they have something to lose. But, as he admits, that new market psyche requires coordination from global regulators and company owners. A full conversion may require another crisis.

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Paul Myners, the UK financial services minister, stressed the government's determination to end what he called the free subsidy of the banking system by the taxpayer.

"We need to do everything we can to shrink the subsidy to zero. But if even a sliver of it remains, banks will have to pay for it, he said.

It is the goal of this government to make sure financial markets can punish just as easily as they reward.

However, he cautioned that the UK could not unilaterally adopt standards which are significantly more demanding than in competitor countries without consequent disadvantage to its economy.

The comments were made in a speech to the UK Smith Institute on March 8.

Myners attacked companies for accepting excess fees on rights issues and lambasted shareholders for tolerating excess pay to bank employees, as well as casually approving company takeovers that may not be in their interest.

Context News

Paul Myners, the UK financial services minister, stressed the government's determination to end what he called the free subsidy of the banking system by the taxpayer.

"We need to do everything we can to shrink the subsidy to zero. But if even a sliver of it remains, banks will have to pay for it, he said.

It is the goal of this government to make sure financial markets can punish just as easily as they reward.

However, he cautioned that the UK could not unilaterally adopt standards which are significantly more demanding than in competitor countries without consequent disadvantage to its economy.

The comments were made in a speech to the UK Smith Institute on March 8.

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