Rebel banking inquiry: Let's pay back deficit in one go

By Charles Maggs

One final round of quantitative easing should be used across Europe to clear government deficits, according to a rebel banking inquiry.

Labour MP John Mann set up his own inquiry after the Commons comm. Ittee he sat on removed him and fellow agitator Andrea Leadsom for an investigation into the Libor scandal at Barclays.

"Every European government has acquired huge debts through bailing out the banks, yet these banks continue to soak in resources that are better spent in the productive economy," Mann said.

In a keynote speech later today he will suggest that the reserve base of central banks should be broadened to cover the amount borrowed to bail out banks during the financial crisis.British sovereign debt is forecast to surpass £1.4trillion this parliament.

Critics may point to risks of high inflation that this policy may entail, on the day when CPI has fallen to 2.5%, less than half the rate of price increases of last year.

He will also call for three tiers of bank accounts to protect consumers, from a standard low risk account, to a high risk 'high investment' account.

The  Bassetlaw MP said the west's failure to tackle the banking industry meant it was falling behind internationally.

"Whilst we are sellotaping over the banking system, China in particular is building a competitive base that will dominate world economies for decades," he said.

"We are like fools at the emperors ball."