Britain needs Paulson’s package

British businesses need the Paulson package to be agreed or else they will face further financial uncertainty, according to John Cridland, director general of the Chartered Business Institute (CBI).

US Treasury Secretary Henry Paulson’s proposed $700bn bail-out package for the financial markets hit a roadblock when a bill couldn’t be agreed in Congress.

Cridland welcomed the Bank of England’s move to pump £55bn into the British banking system as hopes of the US bail-out faded.

‘Today’s announcements are welcome, necessary and needed,’ he said.

While Cridland acknowledged that there was legitimate public concern about the effectiveness of regulations in the financial services industry, he urged government to keep an eye on the UK’s competitiveness when considering tighter regulations.

‘Policymakers need to pause,’ he said. ‘And make sure any action they take is targeted and proportionate.

‘Politicians shouldn’t regulate how businesses are managed.’

Joining Cridland at the briefing on the outlook for the financial services sector, Andrew Gray, banking advisory leader at PricewaterhouseCoopers, said there was no ‘systemic risk’ to the UK banking industry.