Vince Cable bashes rip off banks again

Customers are being ripped off by Britain’s biggest banks, which in turn is giving those banks excess profits says Vince Cable, who launched an attack on the lending institutions before a crucial industry report was published less than 60 days ago.

The Business Secretary says that staff at banks were more interested in lining their pockets with performance bonuses than in helping out clients, and lenders were relationships with small businesses were being left to wither away.

The Secretary said competition is the best answer to the banks ingrained rip-off culture that has taken huge profits from clients. What has happened of late are two individual phenomena; first you have bank personnel that have their own incentives to sell products that cuts across relationships and the other is most banks today have broken away from local banking relationships.

Some banks have acknowledged that has happened and some have said they are trying to return to personal banking relationships. Secretary Cable also spoke harshly of Continental banking, accusing both Germany and France of hiding financial system problems of their own.

He said there has been a reluctance of their governments, the European Central Banks and other banks to accept the losses on Greek debt and still have not been willing to accept the magnitude of the problem.

These comments from Mr. Cable come before the publication September 12 of an Independent Commission for Banking (ICB) that was Government appointed and will recommend a number of reforms to the industry.

Those that fear radical change may be worried about the Secretary’s comments since he is a Cabinet member of the banking committee that decides which ICB recommendations need to be enacted. It appeared that he suggested the Commission’s proposal of ring-fencing the banks’ retail operations in the UK could effectively dismantle big banks such as Royal Bank of Scotland and Barclays.