MPs asked by banks to 'lean on watchdog'
SIR Mervyn King fired his final parting shot at the banks yesterday as he attacked lenders for their intense political lobbying against tougher balance sheet rules.
In his last appearance in front of MPs on the Treasury Select Committee before handing over the reins next week, the Bank of England governor said banks sought to put "tremendous pressure" on politicians to lean on regulators to water down demands to raise capital strength. He said there were "certainly calls made to Number 11 (Downing Street) and in some cases Number 10" to put pressure on the Prudential Regulation Authority (PRA).
"Very often it was the first response" by banks to call politicians after confidential talks with regulators, he added.
He praised the PRA for maintaining its independence, but said lobbying must stop.