Five minutes past midnight, as far as the disintegration of the Trans-Atlantic financial system goes, some in the United Kingdom have initiated discussion of how to shift political arrangements so as to get a government prepared to implement Glass-Steagall bank separation in the UK.
A week after publishing its first call for Glass-Steagall, the Financial Times ran an editorial (July 9) complaining that "the reaction of Britain's political class to the Libor scandal has fallen significantly short of what the public rightly expected" of them as to addressing "the failures of the banking system." Labour Party leader Ed Miliband was singled out for remaining vague "on one of the biggest questions: whether to force an outright Glass-Steagall-type separation of retail from investment banking.... It is now clear that ringfencing is not enough.... Britain's leading parties should show they have understood what is at stake."
Fast forward to today, where we find the Fabian Society's New Statesman raising Glass-Steagall as central, in its suggestion of what Miliband must do to put together a strategy to win a strong majority in Parliament. The magazine demands that "Labour needs to be bolder, more ambitious" than the economic policies it currently espouses, with Labour "shadow chancellor" Ed Balls singled out as an obstacle, because "it is said he vetoed Mr. Miliband's plan to support a full Glass-Steagall-style seperation of retail and investment banking."
Likewise, Lord Oakeshott, a leading figure in the Liberal Democrat's active "Glass-Steagall" grouping, took aim yesterday at current party leader, Nick Clegg, who crafted the LibDem's coalition with the ruling Conservative Party. In an interview with BBC Radio Today which set off a huge "row" in Britain, Oakeshott suggested Clegg be ousted as leader, citing the need for the party to not just talk about key issues such as "sorting out the banks," but to get them "implemented in government."
The announcement Wednesday that sections of Britain's Investment Management Association believe Glass-Steagall is needed, tips the scales further in favor of the Glass-Steagall forces. The IMA represents more than 90% of the UK's 3.9-trillion-pound investment fund management "industry", and claims to control some 34% of UK domestic assets. The IMA's testimony to the Parliament's Committee on Banking Standards, states: the "IMA supports the Independent Commission's proposal for banks to ring-fence their retail operations. However, in view of recent developments, the question needs to be asked whether this goes far enough, in that certain of our members consider there should be full separation."