Vince Cable, Business Secretary yesterday issued a call for British bank shareholders to help curb the ‘daredevil’ behaviour of the UK’s ‘casino banks.
The Business Secretary made the call in a speech to the Association of British Insurers, which are one of Britain’s most powerful and influential investor groups. Cable said that the Government could not tackle the banks a lone and that ‘investing in banking needs to be boring again’.
The speech by Vince Cable was heard just hours after David Cameron, Prime Minister announced that there should be a full Parliamentary inquiry into the British banks and their underhand Libor rigging. Fears are that the dishonest tactics by the banks to rig interest rates could become even more widespread, with more examples being discovered.
Cable said: ‘It is increasingly clear that the management of many banks still don’t get it. They want to choose the high risk, high reward path – seeking high returns on shareholder equity – when it is vital for everyone else that they don’t.
‘And now we are learning that this daredevil behaviour, included taking blatant risks, once again to the detriment of the shareholder.’
‘Now every shareholder needs to make their views clear: that they want a secure, stable return when they invest in a bank, not a ticket to the casino.
‘The question “Why on earth are you doing this?” needs to be heard far more often. It’s time for shareholders to stand up and demand safer behaviour from their banks.’
British bank share prices plummeted on Friday after Barclays Bank got fined £290million, with fears of other fines following. The resignation of Marcus Agius, the Chairman of Barclays seemed to restore a little confidence, seeing share prices recover slightly. Pressure has been building for Bob Diamond, Chief Executive of Barclays to resign, but he has so far held fast.
David Cameron said that: ‘The British people want to see two things. They want to see bankers who acted improperly punished and they want to know we have learned the broader lessons.’