Mayor of London Boris Johnson has warned the Government not to over-regulate the UK banking sector, saying it will not be able to compete internationally.
Speaking at the Confederation of British Industry annual conference today, Johnson said there should be no “gold-plating” of capital rules.
In the draft banking reform bill, the UK is set to go further than Basel III rules on risk-weighted capital buffers and proposes ring-fencing banks’ retail arms from their investment activities.
Johnson said: “We cannot solve the banking crisis by imposing more regulation than our competitors abroad. We should not be gold plating rules on capital adequacy if it makes it difficult for banks to lend and businesses to grow.
“We have to stop vilifying banks and we need to make the moral case for banking and the free market allocation of capital as the greatest way of living.
“We need more moral leadership from bankers and they are doing much better than they used to. Many leading financiers are giving and engaging in society in a way they have not done for 20 years but they will not do it if they feel persecuted by the public and every politician under the sun.”
Johnson also hit out at proposals for a mansion tax and called on chancellor George Osborne to scrap stamp duty on new-build homes in his autumn statement.