The Bank of England governor Mark Carney has dismissed the UK Labour Party leader Ed Miliband’s plan to shake-up UK’s banking industry.
Carney said it was impossible to judge bank competition by market share alone and by just breaking up an institution does not necessarily create a more intensive competitive structure.
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"It’s not just about one aspect, you need to look at the whole business model and their risk structure," Carney added.
According to Chancellor George Osborne, the introduction of bonus cap would mean higher pay-outs of basic salary, which would be more difficult to handle with.
Carney has also rejected the Miliband’s plan, which was based on the US law, to prevent a bank from having more than 10% share of retail deposits.
Carney said, "That ruling did not in itself prevent the creation of large systemic financial institutions…[and] one could argue a bit that by limiting the absolute funding for large institutions, it encouraged the move into wholesale funding."
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