Obama agrees with CSM Call for Separation of Banks

President Obama yesterday announced plans to introduce ground breaking legislation to Congress to separate the banks. This move has surprised the global community, and banks have been warey while campaign groups have welcomed his plans.

In his speech Obama said ‘Never again will the American taxpayer be held hostage by a bank that is too big to fail.‘ Obama told banks that they would no longer be allowed to take risky bets with their own capital. He said he would ban takeovers and mergers among US firms in the sector. “We simply cannot return to business as usual," he said.

At CSM we are delighted with this announcement. Separating the banks has been a long running CSM campaign, so we are pleased Obama is taking this bold move that we have been lobbying for. We are now continuing to lobby the UK government to do the same.

CSM has published various articles advocating separation of the banks. In one article Stephen Beer and John Mitchell said ‘Separating banking functions is a key way of helping ensure the world does not face another financial and economic meltdown with taxpayers again having to bailout the banks.‘ You can read our article about the case for separating the UK banks here.

The CSM campaign has mainly focused on separating casino banking from retail banking. The connection of these two sectors caused problems in the latest financial crisis. We therefore believe this is the most important aspect of the plans announced by Obama and of our campaign. You can read the arguments for and against here.

ING announced last year they would be splitting up their banking group. They plan to split up their banking and insurance activities completely over the next three years. We are pleased that ING have taken a lead in this and are encouraging other banks to do the same.

The Rt Hon John McFall MP and the Rt Hon Alan Michael MP have written an Early Day Motion urging the UK government to separate the banks in the way CSM have been campaigning for. You can read the text of the Early Day Motion here. Please lobby your MP to sign the EDM and increase pressure on the government to act on this vital policy. You can find out who your MP is here, then please send them a letter or email urging them to sign EDM 531.

Esther Barlow, 22/01/2010