Bank Lending and Credit (Businesses)

Part of Chancellor of the Exchequer – in the House of Commons at 2:30 pm on 6th December 2011.

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Photo of George Osborne George Osborne The Chancellor of the Exchequer 2:30 pm, 6th December 2011

The Financial Policy Committee, which is the body that we have established in the Bank of England to provide advice on issues that affect the whole financial system, is absolutely right to say to banks that they should be using any earnings that they have to strengthen their balance sheets if necessary, rather than distributing them in larger bonuses. We need stronger banks, not larger bonuses, this winter. The advice from the Bank of England is very clear, and I would expect the banking system to follow that advice.

When it comes to shareholders, it is particularly good news that the Association of British Insurers has said this morning that it expects to see restraint in financial sector pay. We have to ensure that our banks are prepared for whatever is thrown at them in the coming months, and that they do not pay the large bonuses that used to be paid out.

[Interruption.]

They were paid out when people like Chris Leslie supported the Government.