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"... it is much better if we can find global solutions but it will be difficult to get complete unanimity globally about exactly what needs to happen.  

MARK THOMAS, STRATEGY CONSULTING, PA CONSULTING GROUP

Chancellor to announce changes to UK financial services regulator

Mark Thomas
BBC News Channel
16 June 2010

Broadcast interview

PA’s Mark Thomas was interviewed for the BBC News Channel ahead of Chancellor of the Exchequer George Osborne's first Mansion House speech.  In his speech, the chancellor announced big changes to the way banks and financial institutions in the UK are regulated.  Mark spoke to BBC business correspondent, Simon Jack, about what impact this is likely to have.

In the interview, Mark says that it is very likely that the Bank of England will take on supervisory responsibility for banks. 

On the issue of a tax on banks, Mark says: “There is clearly a difficulty in anything that we do unilaterally. This is a global problem and banks are highly mobile. So, of course it is much better if we can find global solutions but it will be difficult to get complete unanimity globally about exactly what needs to happen. I think we will probably need to do some things unilaterally and build as strong a global consensus as we can.”

Mark also talks about whether he thinks the Bank of England will be given powers to step in if banks are creating asset bubbles through easy credit, and if the Bank of England is likely to get directly involved in individual banks’ lending decisions.  Mark says: “I doubt if they will get involved on a decision-by decision basis. I don't think it is at that level that they are talking.  But they could impose rules on maximum loan-to-value or maximum loan-to-income ratios.  This would control the extent to which people were buying houses that, in effect, they cannot afford to pay for.”

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