Government’s banking sector blueprint labelled ‘naive’

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A BLUEPRINT for the future of the banking sector has been branded “worryingly naive” by trade unionists.

The Scottish Government strategy document says Scotland should lead the way in building trust with the damaged banking sector by returning to a traditional system. It calls for a focus on “community banking”, better access to loans for smaller businesses and more professional standards.

In the foreword, First Minister Alex Salmond said poor conduct in the sector had led to public hostility which needed to be repaired.

The STUC welcomed some aspects of the blueprint, and general secretary Grahame Smith said: “It’s important the Scottish Government recognises the status quo isn’t an option and that banks have singularly failed to support growth in the productive economy with patient, committed capital.

“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 failures of 
corporate governance.”