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Politicians call for regulation not speculation in markets
POLITICAL REACTION: Leading politicians yesterday called for greater regulation of the British financial sector in a bid to prevent any more banks being brought to their knees by unscrupulous investors.
It is thought that HBOS has become a victim to traders 'short selling' its shares – starting malicious rumours to panic investors and making huge profits from the proceeds – bringing it to a position where it needed to merge with Lloyds.
George Mudie, the Leeds East MP who sits on the Treasury Select Committee, said: "Regulators have been behind the curve during the whole of the credit crunch. Things change so quickly and they're always left catching up.
"There are many questions to be asked over the involvement of hedge funds and how they are playing the market. I want the regulators to look at this immediately and if there's nothing they can do about it the Government will have to act and should act. Shorting shares should not be allowed to happen."
Halifax MP Linda Riordan said she was "deeply worried" over the future of thousands of HBOS employees, but said that Prime Minister Gordon Brown, who is holding talks with the two banks, was the best man to safeguard their jobs.
"The workforce is very concerned about what's happening and nobody's telling them anything. We've had one merger in the last decade when Halifax joined with Bank of Scotland and we had to fight hard then to safeguard jobs. If we lose many this time it will be disastrous for the area."
Richard Corbett, the Yorkshire MEP, said governments had been leaning too far towards laissez-faire regulation of banks in recent decades and that "firmer, clearer, fairer" regulation was needed.
He said it would be easier to do this at a European level in order to protect each nation from unfair competition.
Bill Adams, the regional secretary of the Trades Union Congress, said regulators had allowed hedge funds, private equity groups and speculators to get involved. "It's a disgrace – people's savings, mortgages and pensions are being messed about with.
"We need more regulation and less speculation."
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Weather for Yorkshire
Tuesday 22 May 2012
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