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'Leveson-style' banking inquiry urged Ed Balls backs calls for 'Leveson-style' banking inquiry
(about 1 hour later)
Calls are growing for a "Leveson-style inquiry" into banking. Shadow Chancellor Ed Balls has thrown his weight behind calls for an independent "arms length" probe into the culture of "lying" in UK banks.
He said that in retrospect, Labour had not been tough enough on the banks.
But people had been shocked by the "swaggering arrogance" that had come to light in the past 24 hours.
The Lib Dems, Tory backbenchers and the TUC have also called for a Leveson-style probe - but the Treasury and the Bank of England have rejected the idea.
Mr Balls, who as Labour's City minister championed "light touch" regulation, said only an independent arms length inquiry will get to the bottom of bad regulation that he said dates back to the 1980s.
He told the BBC News Channel that it was the "culture of lying" in banks as much as the regulatory framework that needed to change - and there was now a case for a full public inquiry.
He said: "We can't just brush this under the carpet. People are shocked by the swaggering arrogance of what we discovered in the last 24 hours, and I think we need to open this wide open. "
It follows Barclays being fined for trying to manipulate a key bank interest rate and the revelation that banks mis-sold specialist insurance.It follows Barclays being fined for trying to manipulate a key bank interest rate and the revelation that banks mis-sold specialist insurance.
Mark Garnier, a Conservative member of the Treasury Select Committee, said a process in which banks were "pulled over the coals" would address public fears. Bank of England Governor Sir Mervyn King said Britain's banks need a "real change in culture" but ruled out a wider inquiry and the Treasury said "action not words" is what is needed.
But The Treasury said "action not words" is what is needed.
Sir Mervyn King, Governor of the Bank of England, said Britain's banks need a "real change in culture" but ruled out a wider inquiry.
Labour says a commission or inquiry into the culture and practices of the banking sector should be considered.
The TUC said is was "time for a fresh start" in banking and also backed an inquiry, as did the independent think-tank the New Economics Foundation.
A petition on the government's e-petition website calling for a judicial public inquiry into the wrongdoing and ethics of bankers with "full powers to compel witnesses to appear on oath, and to obtain all forms of evidence" has received nearly 4,000 signatures.A petition on the government's e-petition website calling for a judicial public inquiry into the wrongdoing and ethics of bankers with "full powers to compel witnesses to appear on oath, and to obtain all forms of evidence" has received nearly 4,000 signatures.
On Thursday the Financial Services Authority's (FSA) fined Barclays £290m for trying to manipulate the inter-bank lending interest rate and the FSA has revealed some of Britain's biggest banks have mis-sold specialist insurance tied to thousands of small businesses. On Thursday, the Financial Services Authority's (FSA) fined Barclays £290m for trying to manipulate the inter-bank lending interest rate and the FSA has revealed some of Britain's biggest banks have mis-sold specialist insurance tied to thousands of small businesses.
'Fundamental dishonesty''Fundamental dishonesty'
Some MPs have called for Barclays chief executive Bob Diamond to resign and David Cameron has said the bank's management faces "serious questions".Some MPs have called for Barclays chief executive Bob Diamond to resign and David Cameron has said the bank's management faces "serious questions".
Lib Dem backbench Treasury spokesman Stephen Williams backed calls for a Leveson-style inquiry.
And Mark Garnier, a Conservative member of the Treasury Select Committee, said a process in which banks were "pulled over the coals" would address public fears.
Mr Garnier said the levelling of the fine on Barclays was a "game changing moment" which showed a "Leveson-style" inquiry was now needed to restore the public's trust in banks.Mr Garnier said the levelling of the fine on Barclays was a "game changing moment" which showed a "Leveson-style" inquiry was now needed to restore the public's trust in banks.
Lord Justice Leveson is carrying out an inquiry, which has already lasted more than 12 months, into the culture, practices and ethics of the media following the phone hacking scandal.Lord Justice Leveson is carrying out an inquiry, which has already lasted more than 12 months, into the culture, practices and ethics of the media following the phone hacking scandal.
During the course of the inquiry new evidence has come to light and witnesses, which have included journalists, top politicians and victims of phone hacking, have been subject to lengthy and detailed questioning by a barrister.During the course of the inquiry new evidence has come to light and witnesses, which have included journalists, top politicians and victims of phone hacking, have been subject to lengthy and detailed questioning by a barrister.
Mr Garnier said: "The issue we had prior to yesterday (Thursday) was banks had been humongously irresponsible but had been acting within the rules and it was the rules that were the problem.Mr Garnier said: "The issue we had prior to yesterday (Thursday) was banks had been humongously irresponsible but had been acting within the rules and it was the rules that were the problem.
"What we see now is fundamental dishonesty and systemic and institutionalised behaviour."What we see now is fundamental dishonesty and systemic and institutionalised behaviour.
"It's getting to the stage where there is now an interesting and compelling argument for having a more detailed look at it. A Leveson-style inquiry could dig deeper.""It's getting to the stage where there is now an interesting and compelling argument for having a more detailed look at it. A Leveson-style inquiry could dig deeper."
Labour's shadow business secretary Chuka Umunna echoed Mr Garnier's concerns: "Its not just isolated cases anymore.Labour's shadow business secretary Chuka Umunna echoed Mr Garnier's concerns: "Its not just isolated cases anymore.
"We now have a catalogue of scandal and wrongdoing. You can't dismiss this as a one-off and its insufficient to say its rogue traders. If ever there was a time to have this, its now.""We now have a catalogue of scandal and wrongdoing. You can't dismiss this as a one-off and its insufficient to say its rogue traders. If ever there was a time to have this, its now."
He said a commission or inquiry into the culture and practices of the banking sector should be considered.He said a commission or inquiry into the culture and practices of the banking sector should be considered.
But Treasury Minister Mark Hoban told BBC News: "I think there have been a lot of inquiries. The Treasury Select Committee have done their own inquiry. We had the Independent Commission on Banking that we set up.But Treasury Minister Mark Hoban told BBC News: "I think there have been a lot of inquiries. The Treasury Select Committee have done their own inquiry. We had the Independent Commission on Banking that we set up.
"I think what households, taxpayers and businesses want to see is action not words and we're taking the tough action that's needed to get the regulation right and help change the culture of banking in this country.""I think what households, taxpayers and businesses want to see is action not words and we're taking the tough action that's needed to get the regulation right and help change the culture of banking in this country."