[Due to word limit I have had to split this into multiple parts so please view them all & I assure you this submission is certainly worth your time just on originality alone!]
[Part A]
I propose to radically overhaul the UK's current overly-concentrated, fragile, 'Too Big To Fail', SME-hating retail banking system by replacing it with a more resilient, democratically accountable & SME friendly retail banking system. Impossible? Nope.
How? I propose the following:
1) Tighten the legal definition of a 'deposit' by investigating how it can be legally expanded so it's closer to the public's perception of what a 'deposit' is (e.g. money securely placed in a bank which they can withdraw or keep their at their will) rather then the current definition of 'deposit' as some kind of loan given to the bank (i.e. a debt which the banks owes the public) which a bank may or may not honour during a financial crisis.
2) Investigate whether UK by having 90% of it's deposits being in 5 mega banks is not only a sign of how monopolistic UK retail banking has become but also extremely fragile (i.e. banks now become 'Too Big To Fail' & must be bailed out if they go under in order to not destablise UK economy).
3) Investigate whether there should be 'bank guidance on credit' for all banks operating in the UK & that there should be a total ban on all indebted UK-based banks from providing credit for financial transactions either within the UK or internationally.
Why? Because though a future Labour-run Treasury would not be able to stop speculators speculating on the financial markets it would, by banning banks from providing credit for financial transactions, would stop speculators financing the speculations by borrowing from banks and thereby drastically reduce exposure of that bank to reckless speculation.
4) Investigate whether the UK state should be constitutionally obliged to break up into smaller individual regional banks all UK-based banks that get into such debt that it requires not just a large bail-out but also a partial nationalisation in order to keep that bank financially viable.
5) Ban all UK-based corporate banks from engaging in 'stock buy-backs' if they either indebted or are partly owned by the state. Why? See February 2019 attempts by (often accused of fraud?) RBS to begin engaging in mass 'stock buy-backs' in order to prevent a future Labour government from breaking it up.
6) Use 'big data' to investigate how frequently UK-based banks have abused their 'terms of lending' (e.g. see February 2019 case of Newham council suing RBS over borrower option loans) when lending to public sector organisations (e.g. local government) & whether this is likely to become a potentially major/national 'mis-selling' scandal.
7) Investigate whether one of reasons why lending from mega banks to SMEs don't occur much is legally banks are not 'lenders' but rather 'purchasers of securities' & that since the UK doesn't have a 'Glass-Steigal Act' this trend of banks becoming 'purchasers of securities' has become the norm as well as investigate whether QE also entrenched this trend (i.e. banks becoming 'purchasers of securities').
8) Investigate the link between how large a UK-based retail bank is with how likely that bank is going to close it's high street branch & thereby contribute to the decline of local economies of the UK.
[See part B]
The Economy, Business and Trade Policy Commission develops Labour's economic and business policy, including industrial strategy and international trade.
