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Barclays scandal: Wycombe MP Steve Baker's radical plan gaining support and he says: Bob Diamond was right to quit
A RADICAL plan to make bankers pay out of their own pockets for their failures is gaining support after the Barclays scandal, its creator, MP Steve Baker says.
Scathing attacks have been aimed at the banking giant's bosses since it was fined £290million by the Financial Services Authority for 'rate rigging'.
Chief Executive Bob Diamond quit yesterday and faces a grilling by MPs today.
Wycombe MP Mr Baker put forward a bill earlier this year to make bankers personally liable for their actions.
Now, his idea is attracting more attention after the crisis engulfed Barclays and the banking sector.
His proposals have come out of work through economic educational charity The Cobden Centre, which he co-founded.
He said: “Some of the ideas when I floated them in bills seemed a little bit off the main stream. “Now people are saying to me I was right.
“There has been more interest in the bill, it's attracted more support and it's got legs now. It's obvious there's been some exceptionally bad behaviour amongst banks.
“As time passes we'll see it's wider spread than it currently appears.”
In future, rather than the Government dipping into its drained resources to bail out banks, senior figures would bear their own commercial risks under his proposal.
They would be bankrupted personally if their bank went under.
He said: “My point is that when you insulate people from the consequences and give them incredibly large incentives to make profits, if they don't have to feel the consequences then they will behave recklessly.
“It's a way to ensure people who take the risks feel the downside if the risk goes wrong. It's not capitalism when private individuals get profits and the taxpayer gets losses.”
He believes Bob Diamond was correct to quit.
“I think Bob Diamond made the right decision to resign and also to expose the Bank of England’s role,” Mr Baker said.”
The parliamentarian has put forward some questions for today's Treasury Committee hearing with Mr Diamond, which is set to attract enormous media coverage.