Finance News

Prime Minister Announces Banking Inquiry

Prime Minister David Cameron announced today that there would be a parliamentary review into the banking industry. The move follows wide-spread public anger over the revelations of the Libor affair last week, in which staff at some of Britain’s most powerful banks acted together in an attempt to influence interest rates.
Although there had been calls from some quarters to conduct a full investigation, similar to the Leveson Inquiry into press complaints, the Prime Minister has rejected this and opted for a committee of MPs to look into the issues instead.
He has faced down claims that this is not a strong enough move, stating that “[the] committee will be able to take evidence under oath, it will have full access to papers and officials and ministers, including ministers and special advisers from the last government.”
Meanwhile, leader of the Labour Party Ed Milliband believes that the inquiry will not have the necessary powers to enact real change in the banking system, or to get to the fundamental issues that result in situations like the Libor affair. Instead, he called for an independent inquiry that would not call on politicians to investigate the matter, instead bringing in judges and lawyers.
There may be some appetite for this amongst the public, as the anger towards bankers often mixes with that aimed at MPs, seen as powerless to stop the financial industry and even believed to be in its pocket at times. These beliefs would doubtless taint any findings of a parliamentary enquiry, especially if they were seen not to go far enough.
Although this inquiry will examine the industry as a whole and pass its recommendations onto parliament, the individuals involved in the Libor affair itself still face an uncertain future. Barclays, the bank behind the scheme, has been fined a record £290 million, but the Serious Fraud Office has not yet decided whether it will press charges against those personally responsible for making the arrangements.
With so many new scandals emerging in recent weeks, the public is losing patience with the banking industry at a faster rate than ever.