Swinney calls for urgent banking inquiry

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Finance Secretary John Swinney has called for a full and immediate independent enquiry into banking malpractice and its impact on consumers and businesses.

The call comes as further details of a Financial Services Authority investigation into interest rate rigging by Barclays Bank emerged.

Mr Swinney said:

“Last week’s revelations that Barclays had, for several years, been rigging the rate at which it borrowed money and misleading the regulators about what it was doing has once again undermined public trust in the UK banking sector.

“As further details of the FSA investigation emerge it is clear that that there remain many unanswered questions.

“Before the banks can begin to re-establish a reputation for responsible and accountable management of their customers’ money we need to understand in detail who knew what and when. The impact this has had on people’s mortgages is something that must be uncovered as a matter of urgency.

“Those working in the financial services sector have a duty to protect the investments of their customers. If there is a failure to discharge that duty customers have a right to know why, by whom and how redress will be made. If there is criminal liability this Government will fully support moves to prosecute those responsible.

“I know from my own experience in financial services the weight of responsibility that attaches to those who look after other people’s money. Urgent steps are required to restore the accountability that was then felt across the sector.

“Accountability was eroded prior to the 2008 crash as a consequence of the actions of Government and regulators alike. We must learn from the failures of a regulatory system that concentrated more on what the industry needed than protecting the consumers.

“The banking sector is a sector of many strengths but the greatest must be its ability to earn and maintain the trust of its customers. We need to know that that trust can be well placed. Scotland can and should lead the way in building the better banking system that the public want to see.”