The Treasury Select Committee has been putting the boot into bankers again this morning, suggesting that they made an ‘astonishing mess of the financial system’. Not many people will disagree with that, we suspect – although some might question the wisdom of yet more finger-pointing. The committee also scoffed at claims from the British Bankers Association that small business lending is on the rise – the BBA reckons banks doled out an extra £271m last month, but the Committee says it’s seen no evidence of an improvement. Clearly the banker-bashing hasn’t finished yet…
The cross-party Committee’s latest report, its second on the financial crisis, argues that those pesky bankers are to blame for most of our current woes (and should ideally be placed in stocks and pelted with rotten fruit). ‘The culture within parts of British banking has increasingly been one of risk-taking, leading to the meltdown that we have witnessed,’ said chairman John McFall. This is all very convenient for politicians, of course, since it largely absolves them of blame – although to be fair to the Committee, it did also pin some responsibility on the supervisory system (which includes the Government and the Bank of England as well as the regulators).
The BBA hit back this morning by accusing the Committee of trying to grab headlines rather than say anything useful (MPs? Headline-grabbing? Perish the thought). CEO Angela Knight argued that stoking up more anti-bank sentiment was only going to further damage the UK’s reputation as a financial centre – and besides, it was unfair to tar all banks with the same brush. ‘The industry acknowledged some time ago that in some banks the risk controls were not good enough. But many banks are in fact weathering this financial crisis and it is unfortunate the Committee has not seen fit to recognise this.’
The two groups have also fallen out about small business lending. The BBA said today that SME borrowing was up for the third consecutive month in March, rising 5% or £271m – an apparent sign that the pressure being exerted from above is starting to have the desired effect. However, McFall insists that the small businesses they’ve been speaking to are still finding it very hard to obtain loans – at least without shelling out massive fees and charges. ‘The committee deplores the behaviour of a number of those banks who have received so much public money and behaved in such an insensitive manner,’ he growled.
Bankers will argue that the anecdotal evidence of people ranting to MPs shouldn’t be trusted over statistical evidence. But partly thanks to reports like this, we’re pretty sure who the general populace is going to believe...
In today's bulletin:
5,000 UK companies go bust in three months
MPs slam bankers again - despite rise in lending
Swine flu: don't panic, says Business Link!
If in doubt, don't have a meeting
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