Osborne vows to crack down on UK's 'rogue bankers'
13 November 2015
Rogue bankers should be treated like shoplifters and thrown into jail, the UK's Chancellor of the Exchequer George Osborne said on Wednesday.
Osborne rejected the pleas of senior bankers to ''move on'' from the financial crisis, saying there is still ''understandable anger'' among the public eight years after the run on Northern Rock.
His comments came as Bank of England Governor Mark Carney said the age of ''heads-I-win, tails-you-lose capitalism'' was coming to an end, and promised to root out the ''bad apples'' still working in the financial services industry.
Both men were speaking at the Bank of England's Open Forum event at London's Guildhall, designed to give bankers, regulators and members of the public the chance to take stock.
The country's biggest banks have been mired in scandals including rigging interest rates and foreign currency, and mis-selling payment protection insurance to millions of customers.
Jail sentences of up to seven years have been introduced for rigging Libor interest rates and other financial markets, and the government has been pushing to extend the maximum term to ten years.
But not one senior banker has gone to jail since the financial crisis, when taxpayers were saddled with a £66 billion bill to bail out Royal Bank of Scotland and Lloyds.
Osborne said rogue bankers had escaped punishment for too long and should be treated like common criminals.
''If you go and shoplift at the local WH Smith, you go to prison, but if you're the market trader on the trading floor of a big investment bank, and you rip off people to the tune of millions of pounds, there are no criminal offences available to deal with you,'' he said.
The Chancellor's comments struck a more aggressive tone than in his Mansion House speech in July, when he called for a 'new settlement' with the City. This was widely seen as a plea for an end to ''banker bashing''.
The industry has become increasingly emboldened and outspoken as the political climate appears to have become more favourable.
Bank bosses have begun to lobby more openly against new regulation and taxes introduced in the wake of the financial crisis, having previously preferred to keep their heads low to avoid further criticism.
This summer former Royal Bank of Scotland boss Sir George Mathewson called for an end to banker-bashing and said ''we must look to the future, not the past''. This echoed comments by disgraced former Barclays chief executive Bob Diamond to MPs in 2011 that the ''time for remorse is over''.
Diamond was forced to quit the following year after Barclays was fined £290 million for rigging Libor interest rates.
But on Wednesday Osborne dismissed any notion that the government, regulators and the public are ready to move on as there is still ''totally understandable anger'' over the ''biggest single economic crash of our lifetimes''.
He said, 'The idea that just a couple of years on you can go ''Oh well, let's forget all of that'' and move on is a bit optimistic. It's going to take time, and the financial services sector, and indeed the regulators and the politicians responsible, have to prove to the public that things really have changed.''
Carney said financial markets had been tainted by a string of scandals, but tougher rules are driving out reckless behaviour whereby investment bankers routinely rigged markets to boost their bonuses.
But, talking to Sky News, he acknowledged that ''bad apples'' still work in the financial services sector and need to be rooted out.