Page last updated at 15:14 GMT, Thursday, 14 June 2012 16:14 UK

Minister sets out banking reform plans

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Financial Secretary Mark Hoban has set out plans to give savers greater protection from future bank failures.

On 14 June 2012, Mr Hoban made a statement to MPs about the government's white paper on banking reform, which follows the recommendations made by the Independent Commission on Banking chaired by Sir John Vickers.

The proposals include measures to separate retail banking operations from riskier operations such as investment banking.

Mr Hoban told the House: "We will ensure that British banks will be resilient, stable and competitive, and so attractive to investors at home and abroad."

However, shadow chancellor Ed Balls alleged that Chancellor George Osborne had been "forced to water down" the Vickers proposals after failing to secure "tougher international banking standards".

He added that this was one area of Treasury policy on which Labour would not welcome a "U-turn".

Mr Hoban retorted that Mr Balls, a former Treasury minister, had "stood by when bank balance sheets ballooned, when banks took on these risks".

Plaid Cymru's Treasury spokesman Jonathan Edwards raised concerns about press reports that the reforms would not be implemented until 2019.

He feared this would give "ample time for the all powerful financial lobby to water down these proposals".

The British Bankers' Association has said that the banking sector was working with the government to make reforms, not block them.

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