UK rejects Barack Obama's bank reforms

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By Louise Armitstead and Helia Ebrahimi

The City minister said he saw the President's proposals to break up the investment banks as solutions to "American issues" rather than "necessary actions" for the UK.

"President Obama came out with a solution to the idiosyncratic problems that he sees in the American banking system which is around investment banking in particular," he said. "It's worth remembering that proprietary trading, hedge funds, private equity, these were not at the heart of the difficulties that Northern Rock, or Royal Bank of Scotland or HBOS experienced."

Lord Myners added: "He's developing a solution to what he sees as the American issues, we've already taken the necessary action in the UK."

As banking shares dragged the FSTE 100 down 32 points to 5302.99, its lowest level this year, shadow chancellor George Osborne appeared to row back from his previous position backing Mr Obama.

Mr Osborne had suggested a Tory Government would introduce similar trading curbs for banks. However, on Friday he qualified his response saying: "We don't want to return to the crude Glass-Steagall separation of retail banking and investment banking."

UK rejects Barack Obama's bank reforms

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