David Cameron has said that cleaning up Britain’s discredited and “shoddy” banks is a priority for the Government on a par with cutting the country’s debts.
The Prime Minister expressed his anger after the four biggest high street banks — Barclays, HSBC, Lloyds TSB and the Royal Bank of Scotland — admitted culpability in the selling of punitive financial products to thousands of small businesses.
Sir Mervyn King, the Governor of the Bank of England, condemned the “shoddy treatment of customers” and “deceitful manipulation” which he said characterised the culture at leading banks.
Stephen Hester, the chief executive of RBS, agreed to waive his bonus for this year after customers were prevented from accessing their accounts last week.
Last night, Bob Diamond, the chief executive of Barclays, defied calls for his resignation after Mr Cameron again failed to back him. A major investor in Barclays threatened legal action against the bank’s board if Mr Diamond did not return bonuses.
On Wednesday, Barclays was fined a record £290million after it admitted conspiring to fix global interest rates. The manipulation of the Libor rate is thought to have cost consumers, businesses and investors up to £30 billion.
Today The Daily Telegraph discloses that the fixing of the Libor rate may mean the banks milked the taxpayer for hundreds of millions of pounds as they manipulated the fees they paid for government assistance in 2008 and 2009. Ed Miliband, the Labour leader, demanded an independent inquiry into the conduct of the banks.
Mr Cameron rejected his calls but said it was vital that regulatory and criminal investigations went “wherever the evidence leads” and held those responsible to account “without fear or favour”.
“Dealing with this whole issue is vital for the Government; frankly it is as vital as dealing with the unsustainable debts that we were left by the last government,” he said.
“We know what needs to be done so let’s get on and take those actions. I think the most important thing people want to see is a really concrete set of actions that will help change the culture.”
The Bank of England Governor issued an unprecedented rebuke of the culture in British banks. “What I hope is that everyone now understands that something went very wrong with the UK banking industry and we now need to put it right,” Sir Mervyn said.
“From excessive levels of compensation, to shoddy treatment of customers, to deceitful manipulation of one of the most important interest rates.
“We can see that we need a real change in the culture of the industry. And that will require two things: one is leadership of an unusually high order and [the other is] changes to the structure of the industry.”
Lord Turner, the chairman of the Financial Services Authority, the City regulator, added: “I think we would be fooling ourselves if we thought that some of the behaviour and culture evidenced in Libor fixing are not found in some other areas of trading activity as well.”
Business groups said that traders and executives responsible for fixing interest rates should be punished. Sir Roger Carr, the president of the CBI, said: “The manipulation of the Libor arrangements is deplorable and undermines international trust in the integrity of the City.
The weakness must be addressed and the culprits punished.” Simon Walker, the director-general of the Institute of Directors, said: “As well as ripping off their customers, they have also harmed the reputation of business as a whole: they should feel deep shame for the damage they have done.
“There is a serious failure of leadership in many of the banks. It is high time for a clear out of the leaders who created this mess.”
Yesterday Barclays, HSBC, Lloyds and RBS admitted to mis-selling complicated interest rate schemes to small and medium-sized businesses.
They agreed compensation, which could run into billions of pounds, and to stop selling the most complex products.
Martin Wheatley, the head of financial conduct at the FSA, said: “For many small businesses this has been a difficult and distressing experience with many people’s livelihoods affected.”
The FSA said about 28,000 businesses had been sold the schemes, following a two-month review prompted by a Telegraph investigation that uncovered widespread evidence of mis-selling.
telegraph.co.uk
The Prime Minister expressed his anger after the four biggest high street banks — Barclays, HSBC, Lloyds TSB and the Royal Bank of Scotland — admitted culpability in the selling of punitive financial products to thousands of small businesses.
Sir Mervyn King, the Governor of the Bank of England, condemned the “shoddy treatment of customers” and “deceitful manipulation” which he said characterised the culture at leading banks.
Stephen Hester, the chief executive of RBS, agreed to waive his bonus for this year after customers were prevented from accessing their accounts last week.
Last night, Bob Diamond, the chief executive of Barclays, defied calls for his resignation after Mr Cameron again failed to back him. A major investor in Barclays threatened legal action against the bank’s board if Mr Diamond did not return bonuses.
On Wednesday, Barclays was fined a record £290million after it admitted conspiring to fix global interest rates. The manipulation of the Libor rate is thought to have cost consumers, businesses and investors up to £30 billion.
Today The Daily Telegraph discloses that the fixing of the Libor rate may mean the banks milked the taxpayer for hundreds of millions of pounds as they manipulated the fees they paid for government assistance in 2008 and 2009. Ed Miliband, the Labour leader, demanded an independent inquiry into the conduct of the banks.
Mr Cameron rejected his calls but said it was vital that regulatory and criminal investigations went “wherever the evidence leads” and held those responsible to account “without fear or favour”.
“Dealing with this whole issue is vital for the Government; frankly it is as vital as dealing with the unsustainable debts that we were left by the last government,” he said.
“We know what needs to be done so let’s get on and take those actions. I think the most important thing people want to see is a really concrete set of actions that will help change the culture.”
The Bank of England Governor issued an unprecedented rebuke of the culture in British banks. “What I hope is that everyone now understands that something went very wrong with the UK banking industry and we now need to put it right,” Sir Mervyn said.
“From excessive levels of compensation, to shoddy treatment of customers, to deceitful manipulation of one of the most important interest rates.
“We can see that we need a real change in the culture of the industry. And that will require two things: one is leadership of an unusually high order and [the other is] changes to the structure of the industry.”
Lord Turner, the chairman of the Financial Services Authority, the City regulator, added: “I think we would be fooling ourselves if we thought that some of the behaviour and culture evidenced in Libor fixing are not found in some other areas of trading activity as well.”
Business groups said that traders and executives responsible for fixing interest rates should be punished. Sir Roger Carr, the president of the CBI, said: “The manipulation of the Libor arrangements is deplorable and undermines international trust in the integrity of the City.
The weakness must be addressed and the culprits punished.” Simon Walker, the director-general of the Institute of Directors, said: “As well as ripping off their customers, they have also harmed the reputation of business as a whole: they should feel deep shame for the damage they have done.
“There is a serious failure of leadership in many of the banks. It is high time for a clear out of the leaders who created this mess.”
Yesterday Barclays, HSBC, Lloyds and RBS admitted to mis-selling complicated interest rate schemes to small and medium-sized businesses.
They agreed compensation, which could run into billions of pounds, and to stop selling the most complex products.
Martin Wheatley, the head of financial conduct at the FSA, said: “For many small businesses this has been a difficult and distressing experience with many people’s livelihoods affected.”
The FSA said about 28,000 businesses had been sold the schemes, following a two-month review prompted by a Telegraph investigation that uncovered widespread evidence of mis-selling.
telegraph.co.uk
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