Responding to the Scottish Government paper ‘Sustainable, Responsible Banking’ published today, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:
“The STUC welcomes this contribution to the on-going debate over the future of banking in Scotland. It’s important the Scottish Government recognises that the status quo isn’t an option and that banks have singularly failed to support growth in the productive economy with patient, committed capital. The prominence given to alternative business banking business models and credit unions is also welcome.
“However, the paper is insubstantial and worryingly naïve on some fundamental issues. The destabilising impact of institutions which continue to be too big to fail and too complex to manage is sidestepped. There is a meek acceptance that the ‘attitude of the banks’ has changed post crisis. The assumption that the introduction of a few new players will transform the dominant business culture reveals an incomplete reading of recent history. The appalling recent treatment of retail bank staff is ignored as are the failures of corporate governance that continue to allow Executives to cream off ridiculous pay and bonuses.
“The proposal for the Scottish Investment Bank to evolve into a Business Development Bank is well intentioned but lacking detail and ambition. It’s disappointing that supporting innovation isn’t flagged as a primary purpose of the new institution.
“Curiously, the argument that ‘independence would allow Scotland access to the necessary levers to encourage a responsible, sustainable banking sector that better meet the needs of the Scottish people, that enhances Scotland’s competitive advantage and that better enables us to address the economic challenges facing us’ isn’t developed to any significant extent in the paper. Perhaps this reflects the very limited powers that would flow to Scotland in this respect under the settlement proposed by the Fiscal Commission”.
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