Ed Mili-band Adds Voice To Calls For Banking Inquiry

Posted by on Jun 30, 2012 | Comments Off on Ed Mili-band Adds Voice To Calls For Banking Inquiry

 

Labor leader Ed Miliband has called for a public inquiry into banking after a series of scandals in the sector.

Barclays employees who colluded with others to fix inter-bank lending rates were guilty of “abusive, predatory… behaviour”, Mr Miliband told the Times.

He said there should be a banking code of conduct, with bankers “struck off if they do the wrong thing”.

No 10 says it has not ruled out an inquiry but ministers have said new regulation is already in the pipeline.

Rogue traders

Labour’s decision to call for an inquiry comes after the Financial Services Authority ordered Barclays to pay a £290m fine for trying to manipulate a key bank interest rate and revelations that banks mis-sold specialist insurance.

The most important thing people want to see is a really concrete set of actions that will help change the culture”

David CameronPrime Minister

Mr Miliband said: “There has been no systematic look at the customs and practices of the banking industry. We’ve got to have an open, independent inquiry with hearings to find out what’s going on in the dark corners of the banks.

“Some of it was clearly illegal, but it goes well beyond that. There is a problem with how these people operate. It wasn’t just a few rogue traders out of control and no-one knew what they were doing.”

Mr Miliband, who is expected to address the issue in a speech to the Fabian Society Annual Conference later, said he hoped the inquiry would be set up with cross-party support and that he hoped for a new code of conduct which was about “probity, honesty, integrity”.

“This is not a victimless crime. There are real people now paying the price,” he added.

BBC political correspondent Gary O’Donoghue said Mr Miliband was “attempting to set the pace” on the issue after a week in which the stock of bankers had fallen to a new low.

He added that while Downing Street had not ruled out an inquiry, David Cameron had yet to be convinced one was needed and that ministers had been stressing the measures already in the pipeline.

These included the separation of bank investment and retail arms and a new regulatory structure.

A petition on the government’s e-petition website calling for a judicial public inquiry into the wrongdoing and ethics of bankers, with “full powers to compel witnesses to appear on oath, and to obtain all forms of evidence”, has received more than 4,500 signatures.

The TUC and some Tory backbenchers have also called for a probe similar to the Leveson Inquiry, which is looking into the practices and ethics of the press, but the Treasury and the Bank of England have rejected the idea.

Culture change

Business Secretary Vince Cable told BBC News he did not have “any strong objection” to an independent inquiry but added: “I’m not sure how it helps.”

Prime Minister David Cameron: ”We need to go further, and we will”

Some MPs have called for Barclays’ chief executive Bob Diamond to resign and Mr Miliband said: “It is pretty clear that change is required at Barclays and it is very hard to see that led by Bob Diamond.”

Bank of England Governor Sir Mervyn King said Britain’s banks needed a “real change in culture” but ruled out a wider inquiry.

Mr Cameron supported his comments, saying action on accountability, regulation, transparency and behaviour was what was needed.

He said: “We know what needs to be done, so let’s get on and take those actions.

“The most important thing people want to see is a really concrete set of actions that will help change the culture.

“You don’t change culture by changing laws and changing regulators alone, but I think if we can do this in a very clear and considered way then we have a chance of getting this right,” he added.

‘Fundamental dishonesty’

Lib Dem backbench Treasury spokesman Stephen Williams backed calls for a Leveson-style inquiry, as did former Conservative chancellor Lord Lamont.

Mark Garnier, a Tory member of the Treasury Select Committee, said a process in which banks were “pulled over the coals” would address public fears.

He said the levelling of the fine on Barclays was a “game-changing moment” because it showed “fundamental dishonesty and systemic and institutionalised behaviour”.

But Treasury Minister Mark Hoban told BBC News there had already been a number of inquiries into the banking sector.

“What households, taxpayers and businesses want to see is action not words and we’re taking the tough action that’s needed to get the regulation right and help change the culture of banking in this country,” he said.

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