RBS boss admits banks need to reconnect with customers

Banks became "detached from society" and still needed to reconnect with their customers, the chief executive of Royal Bank of Scotland (RBS) admitted in a television interview.

Stephen Hester, CEO of RBS, who was being interviewed in the BBC's Today programme said, the industry was "coming down to earth with a bump" following recent scandals.

He added that the UK could not afford "blasting it to smithereens" as banks had a vital role to play.

However, he added, further problems at the banks may be discovered.

Hester was speaking after the lender posted a half-year loss of £1.5 billion.

RBS had been caught in three recent scandals affecting the banking sector, the first being the Libor interest rate-fixing scandal that saw fellow bank Barclays fined £290 milion in June.