By Jon Menon and Caroline Binham
Sept. 25 (Bloomberg) -- The U.K. risks losing business after Financial Services Authority Chairman Adair Turner criticized some banking activities as socially useless, British Bankers’ Association Chief Executive Officer Angela Knight said.
“If we continue to demonize our own banking industry, there is no shortage of other jurisdictions which will leap at the chance of taking the business,” Knight, who heads the U.K. banking industry’s main lobby group, said in remarks prepared for a speech in London yesterday. “Those who have the opportunity for public platforms also have a duty to use that opportunity advisedly.”
Knight spoke after Turner said this week that British banks should place “social usefulness” above profitability and walk away from activities that aren’t of social benefit. Last month, he also mooted a so-called global Tobin tax on banks that would be used to distribute profits to the world’s poor. Britain may be “held back” by such comments as the Group of 20 leaders meet in Pittsburgh to discuss financial regulation, said Knight.
“The manner of our criticism is not helping our negotiating position,” Knight said. “If the price of gaining headlines and column inches in the short term is the cost of jobs, and our country’s economic prospects in the long term, then their price is simply too high,” she said.
World leaders from the Group of 20 countries are meeting in Pittsburgh to develop a plan to force banks to curb leverage, hold more equity capital and keep a greater pool of assets that can be easily traded. They may also consider a plan to restrain bankers’ pay.
The largest corporate taxpayer is the financial services industry, 60 percent of whose contribution is from banks, said Knight. The BBA helps 223 members from 60 countries lobby on U.K. banking issues, according to its Web site.
To contact the reporter on this story: Jon Menon in London at jmenon1@bloomberg.netCaroline Binham in London at cbinham@bloomberg.net
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