Bad bankers were attacked as “wolves in shepherds’ clothing” by the new City minister today as he announced a criminal offence for fiddling the Libor interbank lending rate.
Greg Clark, in his first keynote speech, said he would be a “critical friend” of the City and appealed to the financial services sector to restore trust and purge itself of bad practices.
“The reputation of the City of London is a precious national asset built up over centuries,” he said. “We are the temporary stewards of its reputation, and we have a responsibility to hand that reputation on to future generations whole and intact.”
Announcing that the Government is accepting in full the recommendations of the Wheatley Review into the Libor-fixing scandal, including statutory regulation and a criminal offence for false submissions, Mr Clark said: “Those who attempt to manipulate Libor face the full force of the law.” However, his speech stressed how vital it was for the City to clean up its own reputation.
“We have had small businesses conned by their banks — which they thought of as their long-standing partners and advisers — into buying products that were worthless to them but were a nice little earner for the wolves in shepherds’ clothing on the other side of the deal,” he said.
He warned that if the City failed to respond its enemies would dictate new laws that could be damaging.
“I am a friend of the financial services industry in this country, but a critical friend. In my view that is better than the only alternative: not the uncritical friend, but the hostile enemy.”
The British Banking Association will be stripped of its role as operational Libor administrator under the new reforms. Baroness Hogg will be in charge of finding a successor.
