Belfast Telegraph

Editor's Viewpoint: We need full inquiry into banking sector

Banking appears to be an industry with no sense of shame. Profligate lending practices contributed in large part to the global economic meltdown and subsequent recession, forcing the UK taxpayer to step in to bail out several of the largest banks.

Yet many bank executives continued to harvest huge bonus payments in spite of the public outcry. Now a number of banks are being investigated over interest rate-rigging, with Barclays already cited as one of the main culprits. Barclays' chairman has done the honourable thing and resigned but its chief executive, Bob Diamond, is desperately clinging onto his job.

In Northern Ireland, the chaos at the Ulster Bank continues into its third week, with still no definite end in sight. And there is still no explanation as to why the bank cannot resolve the problems even though the same issues were cleared up at the much larger RBS and NatWest banks several days ago. Simple apologies are no longer enough and the Treasury should take action.

On the scandal of rate-rigging, most people will welcome the decision by the Prime Minister to set up a full parliamentary inquiry. But that should only be a first step. The Serious Fraud Office must also initiate inquiries to ascertain just how widespread the example of corrupt practices went and to bring the guilty to justice.

But this newspaper believes that even these steps will not be enough to restore public confidence in banking. While phone hacking by some national newspapers was a serious charge and justified the establishment of the Leveson Inquiry - which has gone on to probe relationships between the media, Government and police - surely the public crisis of confidence in the banking industry cries out for a similar approach.

The public does not believe that politicians will ever clamp down hard enough on malpractice in banking. It will take an independent, wide-ranging public inquiry to restore credibility to the sector, which is vital to the economic wellbeing of the whole UK.

Popular

From Belfast Telegraph