Lord Myners accused the UK's banks of "gouging" their customers yesterday and warned that shareholders needed to get tougher in their scrutiny of the industry.
Speaking to the Future of Banking Commission, the City minister and former fund manager said that the country's banking industry should not be allowed to make bumper profits after "gouging" customers, with the likes of high overdraft charges, for years, adding that "the banking industry has enjoyed more public subsidy than any other industry in our economy".
Lord Myners also criticised banks' shareholders, accusing them of timidity, while the actions of auditors had "not been properly scrutinised" in the run-up to the financial crisis. "Very few people would say that auditing is delivering to our expectations," he said.
The minister, who was head of the fund manager Gartmore before joining the Government in 2008, said that institutional investors were exposed as the "last bastion of amateurism" in the run-up to the financial crisis, which led to the state rescue of Royal Bank of Scotland and Northern Rock, and the government-sponsored takeover of HBOS by Lloyds.
In a statement, the British Bankers' Association said that the industry is "committed to repaying taxpayers in full for their support during the financial crisis". Barclays, HSBC, RBS and Lloyds all refused to comment.
Lord Myners also called on the banks to appoint "a cynical Scot" to their audit committees to rein in ambitious decisions. In October 2008, the month Lord Myners was appointed to government, the Treasury saved RBS from collapse, injecting £37bn. At the time, RBS's chairman was Sir Tom McKillop, while Sir Fred Goodwin was its chief executive. Both are Scots.Reuse content