Ed Miliband calls for inquiry into banking culture

[FarCenter]

The Labour leader said the industry was plagued by an "institutional corruption" that could only be eradicated by introducing a tough new code of conduct and jail sentences for immoral bankers who abuse the system.

His comments were echoed by Bank of England Governor Sir Mervyn King who demanded a "real change in culture" as Britain's lenders were left reeling following a week blighted by controversy.

Mr Miliband pushed for a 12-month probe to "find out what is going on in the dark corners of the banks" after the Financial Services Authority (FSA) uncovered "serious failings" in the sale of complex financial products to small businesses, just days after the rate-rigging affair emerged at Barclays.

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.

In an interview with The Times, Mr Miliband said: "There hasn't been a proper reckoning for what happened in the banking crisis. The bankers told us - it's all fine, we've cleaned everything up. But I'm afraid that doesn't hold water anymore."

http://www.telegraph.co.uk/news/politics/ed-miliband/9366564/Ed-Miliband-calls-for-inquiry-into-banking-culture.html

Ministers order Libor inquiry following bank rate scandal

The review, led by an independent expert, is expected to begin next week and last all summer, reporting back in the early autumn with recommendations on how to change the process over setting the interbank lending rate.

One possible outcome could see the rate fall under the auspices of the Bank of England or the city regulator, to improve independence, rather than the British Bankers' Association (BBA), where it currently lies.

Separately, the BBA has been conducting its own review into the future of Libor, which was due to report by the end of July. It is unclear whether this assessment will now fall by the wayside or feed into the new rate review.

Any changes suggested to the system following the review could be in place as early as next year, as ministers still have time to amend the Financial Services Bill going through parliament.

The Libor review comes as Bob Diamond, the chief executive of Barclays, has been asked to appear before the Treasury Select Committee on Wednesday.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9366780/Ministers-order-Libor-inquiry-following-bank-rate-scandal.html

Something must have really spooked the Brits for both sides to be calling for investigation of the "cesspit" of British banking. The supremely corrupt financial sector in the City of London is the mainspring of the British economy.

London corruption also has a pernicious effect on the US, since the AIG and Lehman financial shenanigns were done their, the out of control branch of JPM was there, and worst of all, the corruptly set LIBOR rates were used as a benchmare for US adjustable rate mortgages.

[MichaelMcGuire]

1. Ann Pettifor has launched a petition calling for a Leveson-style inquiry

Alistair Darling was Chancellor when the financial crisis started, Ed may or may not like what it brings up due to the failures of this party to act.

For example a few individual have highlight criticisms of the then Chancellor.

Bank of England Governor Sir Mervyn King that Darling’s failure to act quickly in the Northern Rock crisis cost Britain a million jobs. If true this would translate to around 100, 000 jobs in Scotland.

Two weeks ago, FSA Chief Executive Hector Sants said that Darling had ignored advice which could have prevented the run on Northern Rock, the event which precipitated the crisis in the UK.

Lord Tunnicliffe, speaking for the Opposition, said:

“Criminal sanctions are extraordinarily difficult to bring about because of the burden of criminal law.

“It is fair to say though that you can’t find them in the current legislation. And, yes, OK, it’s our fault.” He added quickly: “I hope my leaders don’t hear me say that.”

Source: http://www.scottishtimes.com/libor_scandal_discredits_better_together_chief