King attacks banks amid new scandal

Asian Image: Sir Mervyn King said the UK's banks need a 'real change in culture' Sir Mervyn King said the UK's banks need a 'real change in culture'

Bank of England governor Sir Mervyn King has launched a stinging attack on British banks and called for a "real change in culture" as lenders became further embroiled in controversy.

Sir Mervyn said there was no need for a Leveson-style inquiry, but admitted "something went very wrong with the UK banking industry and we need to put it right".

The governor's comments came as a fresh mis-selling scandal involving complex financial products added to the anger surrounding the rate-rigging affair uncovered at Barclays earlier in the week.

Taxpayer-backed Royal Bank of Scotland also confirmed it was being investigated for manipulating the rates at which banks lend to each other, known as Libor.

Sir Mervyn said: "From excessive levels of compensation, to shoddy treatment of customers, to a deceitful manipulation of one of the most important interest rates and now news of yet another mis-selling scandal we can see we need a real change in the culture of the industry."

He added that hard-working bank staff have been "let down" and that banks now needed "leadership of an unusually high order".

The Financial Services Authority (FSA) revealed earlier that Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group had agreed to pay compensation to customers who were mis-sold interest-rate hedging products.

Some 28,000 of the products have been sold since 2001 and may have been offered as protection - or to act as a hedge - against a rise in interest rates without the customer fully grasping the downside risks.

Martin Wheatley, managing director of the FSA's conduct business unit, said: "For many small businesses this has been a difficult and distressing experience with many people's livelihoods affected."

The findings come after Barclays was fined £290 million by UK and US regulators for manipulating the rate at which banks lend to each other, and echoes the costly payment protection insurance (PPI) mis-selling scandal that emerged last year.

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Comments (10)

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2:27pm Fri 29 Jun 12

E-Types. says...

The chief pot calling the kettles
The chief pot calling the kettles E-Types.
  • Score: 0

3:17pm Fri 29 Jun 12

fossilmole says...

It has gone time for us to be tolerating what is going on with all these money-grabbing, greed-driven shysters operating in our banking system.

If ordinary folks were to apply the sort of rules these animals bring to their everyday working practice we would be locked up within days.

These are the scum who have brought our country and the economic world to the brink of financial destruction yet they still want to be snorting more and more from the same trough!

If the governement doesn't sort this one out we need to set up an embargo situation only to deal with the few firms who seem to ahve some sort of principle to doing business ...and let the rest go rot.
It has gone time for us to be tolerating what is going on with all these money-grabbing, greed-driven shysters operating in our banking system. If ordinary folks were to apply the sort of rules these animals bring to their everyday working practice we would be locked up within days. These are the scum who have brought our country and the economic world to the brink of financial destruction yet they still want to be snorting more and more from the same trough! If the governement doesn't sort this one out we need to set up an embargo situation only to deal with the few firms who seem to ahve some sort of principle to doing business ...and let the rest go rot. fossilmole
  • Score: 0

3:18pm Fri 29 Jun 12

fossilmole says...

Well then Merv! Get on blurry change it. Your in charge...I think!
Well then Merv! Get on blurry change it. Your in charge...I think! fossilmole
  • Score: 0

3:19pm Fri 29 Jun 12

fossilmole says...

Well then Merv! Get on blurry change it. Your in charge...I think!
Well then Merv! Get on blurry change it. Your in charge...I think! fossilmole
  • Score: 0

3:19pm Fri 29 Jun 12

fossilmole says...

Well then Merv! Get on blurry change it. Your in charge...I think!
Well then Merv! Get on blurry change it. Your in charge...I think! fossilmole
  • Score: 0

3:20pm Fri 29 Jun 12

fossilmole says...

Sorry ...loading probs with Echo page ...again!!!!!
Sorry ...loading probs with Echo page ...again!!!!! fossilmole
  • Score: 0

3:25pm Fri 29 Jun 12

PaulErith says...

The problem is that we as a country desperately need the financial industry to thrive. It's all very well hating the banks but it's the only industry this country has.
The problem is that we as a country desperately need the financial industry to thrive. It's all very well hating the banks but it's the only industry this country has. PaulErith
  • Score: 0

3:43pm Fri 29 Jun 12

newscritic says...

Fat cat attacks fat cat...let the hissy fits begin.
Fat cat attacks fat cat...let the hissy fits begin. newscritic
  • Score: 0

3:44pm Fri 29 Jun 12

newscritic says...

PaulErith wrote:
The problem is that we as a country desperately need the financial industry to thrive. It's all very well hating the banks but it's the only industry this country has.
Nationalise them!
[quote][p][bold]PaulErith[/bold] wrote: The problem is that we as a country desperately need the financial industry to thrive. It's all very well hating the banks but it's the only industry this country has.[/p][/quote]Nationalise them! newscritic
  • Score: 0

5:46pm Fri 29 Jun 12

PaulErith says...

newscritic wrote:
PaulErith wrote: The problem is that we as a country desperately need the financial industry to thrive. It's all very well hating the banks but it's the only industry this country has.
Nationalise them!
But we need the competition the private sector provides. That's what drives the profits, and we all benefit in the long run. Yes, a few people cream off millions in bonuses at the top, but it benefits the whole economy.
[quote][p][bold]newscritic[/bold] wrote: [quote][p][bold]PaulErith[/bold] wrote: The problem is that we as a country desperately need the financial industry to thrive. It's all very well hating the banks but it's the only industry this country has.[/p][/quote]Nationalise them![/p][/quote]But we need the competition the private sector provides. That's what drives the profits, and we all benefit in the long run. Yes, a few people cream off millions in bonuses at the top, but it benefits the whole economy. PaulErith
  • Score: 0
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