Support of banks by UK taxpayers ''still extensive''

The support being given to banks in the UK by the taxpayer remains "extensive", one MP has claimed

Margaret Hodge, chair of the Committee of Public Accounts, made her comments as parliament reported on the fiscal stability of the country's financial services providers.

The MP suggested that a "great" risk is still posed to public finances by lenders and that it is time for such institutions to end their reliance on national coffers.

"This committee feels that it is inappropriate for banks dependent on taxpayer support to be generating excessive incomes, unnecessary bonuses or dividends at the expense of exiting public support," she added.

In addition, Ms Hodge warned that current arrangements for winding-up failing financial services providers could not cope with the collapse of one of the major lenders.

This was an issue also addressed in the recent Interim Report of the Independent Commission on Banking (ICB), which the minister said contained analysis that was "highly consistent" with the committee's own findings.

Should the ICB's proposals to ringfence retail banking and raise the equity ratio to ten per cent be put into action, those with finance jobs in London could be set to see significant changes in the future to the industry they work in.