[Un-Allotted Half Day] — Banking (Responsibility and Reform)

Part of Opposition Day – in the House of Commons at 5:15 pm on 7 February 2012.

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Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury 5:15, 7 February 2012

May I thank Mr Umunna for his remarks about my right hon. Friend the Secretary of State for Business, Innovation and Skills? I am sure that the whole House will identify with them.

I welcome the opportunity to debate business lending and the reform of the British banking system. As hon. Members are well aware, we face extremely tough economic circumstances as we weather the ongoing crisis in the eurozone and fix the underlying damage that the previous Government inflicted on the economy.

The UK banking sector in particular faces a long and difficult road to repair, unwinding the irresponsible and unsustainable excesses of the previous decade. In the aftermath of the worst financial crisis in almost a century, bank balance sheets are shrinking under market and regulatory pressure. It is absolutely right that we ensure that our banks build their capital and liquidity reserves in these turbulent times. It was because of that action that all our banks passed the European Banking Authority stress tests.

It is stability that we are safeguarding for the long term by discarding the shadow Chancellor’s discredited tripartite system and implementing the recommendations of the Vickers committee. It is this Government who are ensuring that we build a stable financial sector with the capacity and the market confidence to provide sustainable lending to our most innovative, ambitious and entrepreneurial private sector firms.