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'Still a lot of baggage' in City

There will be more "cringeworthy announcements" about City scandals, a Treasury minister and former senior banker has predicted.

City minister Andrea Leadsom said there was "still a lot of baggage" in the financial industry but senior figures were keen to make amends for the past.

Mrs Leadsom, who held senior roles at Barclays and Invesco Perpetual before becoming an MP, said there was still a long way to go to change the culture in the City.

Asked in an interview with The House magazine whether the City "gets it" and is learning the lessons of the financial crisis she said: "I would say that at the top echelons of the banks, absolutely.

"But I think there's quite a long way to go to really change the culture. I think it did become very transaction-oriented and I think it will take time to recover that.

"I think we are still going to see a lot of cringeworthy announcements."

The City has been hit by a series of scandals including rigging of the benchmark Libor rate and allegations about the foreign exchange market.

A "fair and effective markets" review was launched last month into the way wholesale financial markets operate.

Asked what she meant by "cringeworthy" announcements to come, Mrs Leadsom said : "We've had a number of issues over bank wrongdoing.

"There are inquiries going on, there are some pretty serious allegations out there, we've still got PPI going on. There are still things happening and redress under way.

"So it's quite difficult to just sort of forget about that and move on. There's still a lot of baggage.

"What we are trying to do is to really get to the bottom of everything that's gone wrong but at the same time to move on and start looking to a more positive future.

"There's no doubt that the leaders of the City are absolutely keen as mustard to be looking much more at what they can put into society, how they can do things better, how they can make amends."

Reflecting on her time at Barclays she said that she took the view "the money market guys were the honest ones with the cardigans and beards" who would "never fiddle anything".

"So the day we heard about the Libor rigging, I just though 'well if Libor is rigged then what wasn't rigged?'"

Mrs Leadsom played down concerns about the Help to Buy scheme leading to a house price bubble, saying she received more letters from people concerned about access to mortgages.

"Overwhelmingly, it's achieving its aspiration of helping people to get their first home," she said. "With my correspondence I get many more letters from people saying 'I'm desperate to get a mortgage, why have you done this mortgage market review?' rather than people saying 'oh, you know, property prices are ridiculously high'."

South Northamptonshire MP Mrs Leadsom, one of the ministers with concerns about the £50 billion HS2 project, said she was " absolutely firmly committed to getting decent compensation and mitigation for my constituents and I think there's a long way to go yet".

Before becoming a minister in April she founded the Conservative Fresh Start project aimed at getting a better deal for the UK in Europe.

She said it "might be" worth leaving if proper reforms could not be achieved and backed Prime Minister David Cameron's approach to renegotiating the UK's links with Brussels.

"Obviously (if there's) a nonsense reform that doesn't achieve anything, then it might be," she said. "But at the moment I've spent four years working extremely hard trying to find things that would make it worth staying in."


From Belfast Telegraph