Banks were "unethical"
The financial regulator has branded the conduct of banks in the years running up to the crash as “unethical”, saying that in many cases staff at major lenders did not understand the products they were selling or that they might harm their customers.
By Harry Wilson
Speaking to The Sunday Telegraph, Martin Wheatley, head of financial conduct at the Financial Services Authority (FSA), said Britain has been left with a “big problem” as a result of what he described as the “back book legacy” of the banks actions in the boom years.
“I think the banks suspended normal ethical standards and were selling products that were profitable for the investment banks, not well understood by the banking staff that were introducing them, and not at all understood by the customers who were buying them,” he said.
Last week, the FSA announced a settlement with Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland over the mis-selling of interest rate hedging products to small business customers. Compensation could reach as much as £6bn, according to one law firm.
Banks are also facing anger over an investigation into the attempted rigging of Libor after Barclays admitted it had tried to manipulate the world’s key borrowing rate.
Mr Wheatley, who takes charge of one of the FSA’s two successor organisations next year, also admitted that the FSA had “conflicting objectives” when dealing with banks. Telegraph
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