MPs accuse bankers of creating “an astonishing mess”

by Gill Montia

Story link: MPs accuse bankers of creating “an astonishing mess”

The chairman of the Treasury Select Committee, which has been examining the events surrounding the credit crisis, has accused the UK’s bankers of making “an astonishing mess” of the financial system.

However, the cross-party group of MPs stood firmly behind the Government’s methods of dealing with the crisis, bailing out the banks with taxpayers’ money.

In the Committee’s report, banks were also criticised for making life more difficult for small businesses by raising fees.

In addition, MPs suggest there is “an unresolved inconsistency between… bankers’ assurances that they are increasing their lending and, on the other hand, the widespread complaints of business that credit is difficult to obtain and increasingly expensive”.

Committee members backed the idea of separating out retail and investment banking operations and according to a BBC report, would like details of the bank assets currently guaranteed by the Treasury to be disclosed.

Undeterred by the prospect of sleepless nights, they want to know how much the assets are worth and even how much value they might eventually lose.

On the subject of the Financial Services Compensation Scheme, MPs praised the way in which the body has coped with the near-collapse of the UK banking system and recommended that banks should register each of their brand names separately with the Financial Services Authority, to provide maximum protection for savers.