The Financial Services Authority (FSA) will be abolished by the Revolutionary government, and the banks will be regulated by the Bank of England as before.
The banks will be restricted to banking. Depositors money is to used for loans to real businesses, such as factories, retail shops, haulage companies. Real physical businesses, not fronts for financial concoctions. A proportion may be lent to builders and for bridging loans, home improvements, and the like. A reserve must be invested in ‘safe investments’ such as UK government bonds, large establshed UK company bonds, deposits with the Bank of England. No gambling type activities on the FOREX hedge funds futures etc. Banks may own the buildings they use and have a tiny property investment portfolio. They may make new loans for house purchase or provide consumer credit.The amount banks can borrow will be controlled.
Mortgages will be provided by building societies, and consumer credit will be provided by credit unions, or savings and loan companies.
