Extracts From Osborne's Speech
Updated: 12:18pm UK, Monday 04 February 2013
As Chancellor George Osborne reveals new-ring-fencing regulation to prevent banks from using the "too big to fail" excuse, Sky News has access to the abridged text.
Think of some of the most important moments in your life.
When you bought your own home with a mortgage.
When you took the plunge and started your own business.
When you retired and drew on your pension.
One each of those occasions, you relied on the financial system.
You put your trust in financial firms at some of the most exciting and distressing times, moments in your life. And that's why it's so important to have that trust reciprocated. That is why it's so important to have a banking system that works for you.
Like all this Government's reform - to welfare, to the economy, to schools and to banking - we want to back aspiration and be on the side of those who want to work hard and get on.
Our principles are simple: if you do the right thing, government should support and help you, and remove the barriers in your way.
If you do the wrong thing, you should take responsibility for your actions.
And sadly, nowhere have these simple principles been broken more clearly and indefensibly than in our banking system over the last decade.
Irresponsible behaviour was rewarded, failure was bailed out, and the innocent - people who have nothing whatsoever to do with the banks - suffered.
For many, the financial crash was confirmation of what they felt about our society: that those who are only out for themselves get away with it; and those who work hard and play by the rules get punished.
That is why, five years on from that crash, people are still so angry.
And when people discover more about what went so wrong - the mis-selling of interest rate swaps to small firms who went bust as a result; the greed and corruption on the Libor trading floor - they get angrier still. I understand that anger. I feel it too.
But anger can be a negative, destructive thing if it is not channelled into change.
Let's take the anger we feel about the banks and turn it into change to build the banking system that works for us all.
2013 is the year when we re-set our banking system.
So the banks work for their customers - and not the other way round.
So that those who guard over the banks to keep our economy safe are the right people with the right weapons to do the job.
And so that when mistakes are made, it's the banks and not the taxpayer that picks up the bill.
First, we've got a brand new watchdog with new powers to keep our banks safe so they don't bring down the economy.
Second, we've got a new law to separate the branch on the high street from the dealing floor in the city to protect taxpayers when mistakes are made.
Third, we're going to start with the industry, changing the whole culture and ethics of the business, so they work for you.
Fourth, we're going to give customers the most powerful weapon of all: choice.
This year we're going to start separating the high street banking we all depend on from the City trading floor.
When the RBS failed, my predecessor Alistair Darling felt he had no option but to bail the entire thing out.
I want to make sure that the next time a Chancellor faces that decision they have a choice.
To keep the bank branches going, the cash machines operating, while letting the investment arm fail.
No more rewards for failure. No more too big to fail. No more taxpayers forking out for the mistakes of others.
The same rules for the banking business as any other business in a free market.
It won't mean banks won't make mistakes.
But it does mean that if they do, those parts of the banking system that are vital for families and businesses can continue without resort to the taxpayer.
Your high street bank will have different bosses from its investment bank.
Your high street bank will manage its own risks, but not the risks of the investment bank.
And the investment bank won't be able to use your savings to fund their inherently risky investments.
And my message to the banks is clear: if a bank flouts the rules, the regulator and the Treasury will have the power to break it up altogether - full separation, not just a ring fence.
We're not going to repeat the mistakes of the past.
In the jargon, we will "electrify the ring fence".
Banks working for their customers, not themselves.
Taxpayers' money protected.
The guardians of financial stability with the tools they need to keep us safe.
On all these fronts, we are making major changes.
A financial industry that is strong, successful and inspires the pride of all those who work for it.
That's what Government should be about - taking the big tough decisions because they're right for the long-term good of our country.
Our country has paid a higher price than any other major economy for what went so badly wrong in our banking system.
The anger people feel is very real.
Let's turn that anger from a force of destruction into a force for change.
Change that will give us a banking system that will work for us all.
In 2013, thanks to the changes we are making, that goal is in sight.0
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