The Joplin Globe, Joplin, MO

Business

July 5, 2012

UK Parliament to vote on structure of bank probe

LONDON — Britain’s House of Commons is set to vote Thursday on how it wants to investigate the banking industry in the wake of the scandal of interest rate manipulation at Barclays.

Prime Minister David Cameron is seeking approval for his plan for what he calls a “swift and decisive” investigation to wrap up by the end of the year.

Opposition Labour Party leader Ed Miliband has called for a longer inquiry led by a judge, though he has suggested this could follow the shorter probe backed by Cameron.

The debate has been highly partisan. On Wednesday, Cameron said Labour politicians “want to talk about absolutely everything apart from their record of 13 years in government.”

Miliband has accused Cameron of failing to understand the depth of public concern. Miliband’s proposal was defeated in the House of Lords, but the Commons has the last word.

Parliament has been stirred into action by the rate-setting scandal disclosed last week which cost Barclays bank $435 million in fines.

British regulators also announced last week that Barclays and three other big U.K. banks had agreed to a settlement of complaints that they had sold interest-rate protection products, some of them complex plans linked to derivatives, to borrowers who didn’t understand or need them.

“People want to know that crime in our banks and financial services will be pursued and punished like crimes on our streets,” Cameron said Wednesday. “As well as people being held accountable, the public want rapid action to make sure that this cannot happen again.”

Cameron stoked partisan emotions earlier in the week by saying he wanted to see Ed Balls, a Labour politician who was a Treasury minister in the previous Labour government, put on trial.

“No one would like to see him in the dock of a courtroom more than me, but the job here is to get on with it, find the answers, and put them into law,” Cameroon said.

Miliband argues that a parliamentary inquiry into banks wouldn’t restore confidence.

“However able or distinguished they are, politicians investigating bankers will not command the consent of the British people,” he said.

Miliband wants an inquiry like the current probe of Britain’s media industry, led by a judge with a senior lawyer questioning witnesses under oath.

Members of Cameron’s Conservative Party ceaselessly note that Labour was in power when two big British banks were rescued by taxpayers and that former Prime Minster Gordon Brown of Labour had boasted of the “light touch” financial regulation when he was Treasury chief.

Miliband counters that Conservatives, including Cameron, were demanding even lighter regulation before the 2008 crash.

 

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