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Bank trust shredded in Britain

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Bank trust shredded in Britain

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Public perception that banking practices are inherently dishonest may make the Barclays Libor scandal in Britain a tipping point away from the traditional trust that people place in the system.

Other banks, such as UBS, RBS, Lloyds and HSBC risk a backlash, just as Barclays.

Its actions are under close scrutiny by the UK’s Financial Services Authority.

Tracey McDermott, FSA acting director of enforcement and financial crime, said: “We found serious misconduct in relation to the way they prepared their submissions for the Libor rate being set. Libor is a really important reference rate for millions of contracts all over the world.”

A big wheel in Britain’s economy, the banking sector enjoys a strong dose of government tolerance over how it chooses to run the business – for decades thought too important to interfere with.

Steadily, as crisis followed scandal followed crisis, and salaries and bonuses grew anyway, so did public disgust.

Yet former Barclays chief Bob Diamond, receiving millions of pounds per annum, last year told MPs ‘let’s move on’: “There was a period for remorse and apology for banks. I think that period needs to be over.”

But it is not over till it is over, and surveys say the British do not feel bankers are behaving honestly.

Coralie Pring, with research consultancy firm ComRes, said: “When we ask the British public whether or not they would trust a banker to tell them the truth or not, just 10 percent said they would trust a banker, whereas there is nearly four in five (78 percent) said they wouldn’t trust them.”

Revulsion over corporate greed and companies’ leverage with government last year saw a camp spring up in London’s financial heartland, to protest against what activists felt was corrupt favouritism for the strong at the expense of the weak.

The NGO MyBnk insists there has to be far more public involvement.

MyBnk founder and CEO Lily Lapenna said: “I think with the recession in 2008 we all realised that consumers also play a role within the wider banking crisis and as consumers we need to be informed, we need to be knowledgeable and we need to interact with the banking system at the same level as they are. And for that reason I thing financial education from a young age is extremely important.”