4th July 2012
 
FINANCIAL SERVICES

“The culture in some parts of the financial services industry that was allowed to grow up in the years before the crisis is unacceptable. A long costly public inquiry is not the right answer. It would take months to set up and years to report – but we know what went wrong. We can’t wait until 2015 or 2016 to fix it. We need a new culture of responsibility in banking.

We need a proper, parliamentary inquiry with real powers to hold evidence under oath. Then we can get some answers in the next few months instead of waiting for a decade after the scandal to come up with any answers. This is the right approach because it will be able to start immediately, it will be accountable to Parliament, and it will get to the truth quickly so that we can make sure this can never happen again.

The Blair/Brown government`s failure to regulate the banks in the boom years cost this country billions. The behaviour of some in the financial services has damaged the reputation of an industry that employs hundreds of thousands of people and is vital to the economic prosperity of the country.

This Government is changing the failed regulation; we’re reforming the banks; now it’s time to deal with the culture that flourished in the age of irresponsibility and hold those who allowed it to do so to account.

LIBOR  (The London Interbank Offered Rate)

The Opposition has serious questions to answer following yesterday’s  (Tuesday) allegations that senior figures in the Labour Government pressurised Barclays to rig lending rates.

All this happened under the last Government, and under the failed system of light touch regulation designed by Ed Balls. Even Labour’s Deputy Chief Whip in the Lords, Lord Tunnicliffe, has admitted that the lack of available criminal sanctions was the last Government’s “fault”. One of the first things this Government has done is to start reforming the regulatory system from top to bottom, getting rid of the whole tripartite system. There is a bill currently in Parliament that abolishes the FSA and creates a tough new Financial Conduct Authority which will focus  on market abuse and protecting consumers.

I believe that the people that I represent want to see two more things. That bankers who act improperly are punished, and that we learn the broader lessons of what happened in this particular scandal.

On proper punishment, the Serious Fraud Office are looking at whether there are any criminal prosecutions that can be brought, and they are using the full force of the law in dealing with this. Martin Wheatley, the Chief Executive designate of the Financial Conduct Authority, has been asked to review LIBOR, including looking at the adequacy of the UK’s current civil and criminal sanctioning powers with respect to financial misconduct, and market abuse with regards to LIBOR. Mr Wheatley has agreed to report this summer so that the Financial Services Bill currently before Parliament or the future legislation on Banking Reform can be amended to give our regulators the powers they clearly need.

On the broader lessons, the Government has announced it will establish a full parliamentary committee of Inquiry involving both Houses chaired by the Chairman of the House of Commons Treasury Select Committee. (Andrew Tyrie, MP)  This Inquiry will take evidence under oath have full access to papers, officials and Ministers – including Ministers and Special advisers from the last government and it will be given, by the government, all the resources it needs to do its job properly.”

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