Regulators must tone down bank attacks to help recovery, says Sir John Gieve Sir John Gieve, head of financial stability at the Bank during the financial crisis, suggested strict oversight of the banks was making recovery harder to establish and that the softer policy options of the US were working better. While expressing moral support for the bank crackdown, he argued that policymakers should instead be focusing on how to re-establish growth. Speaking at Fathom Consulting's Monetary Policy Forum, he said: "Pressure on liquidity and capital, plus continued debate on what is an allowable banking model, is pushing them to deleverage more than they might be forced to anyway. I think this is an area where the US managed, by being rather over generous on any objective basis, to get their banks out of crisis mode and back into lending mode more than we have. I would be seeing if there were things we could do... that would be more effective than denouncing them for continuing to pay dividends and bonuses, which is a perfectly valid point but in macroeconomics the job is to get the aggregates to move. Sir John said banks have been led to believe they must boost their safety buffers, in part by cutting credit. "The rhetoric has been one which says we want to see you go faster and further," he said. Banks have already cut lending to UK companies by £151bn since December 2008, according to official figures. Lack of clarity about how banks should be structured in future is not helping, he added. The Queen's Speech on Wednesday is expected to provide some detail of future reforms, including ringfencing the retail bank. Fathom also unveiled its latest forecasts. It expects the economy to shrink by 0.1pc this year and grow by a 1pc in both 2013 and 2014, but for inflation to remain above 2pc.