MP condemns London bankers at Goldman Sachs and Nomura over Portugal deal and calls for curbs on interest charged to taxpayers
John Mann called the selling of swaps 'immoral'
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Deputy business editor
Friday 18 July 2014
A senior MP on the Treasury select committee has condemned the behaviour of some City bankers after The Independent revealed they had made tens of millions of euros of profit selling extremely complicated financial products known as swaps to public organisations in Portugal.
John Mann called for curbs to be placed on how much banks can charge taxpayer-funded entities for financial products.
He added: “These deals may not be illegal, but they are immoral.”
The Independent's investigation found that Goldman Sachs and Nomura had made huge profits selling the state-owned Metro do Porto bets known as “swaps” which the Portuguese civil servants had hoped would reduce the interest charges on a €126m loan. The swaps went so badly for the Portuguese that the Metro soon ended up owing more on the swap than the total loan itself.
Both banks declined to comment.
Mr Mann said: “The Financial Conduct Authority has placed limits on the total amount of interest and charges that consumers can be liable to owe payday lenders. It is time to look at similar regulations for the City - especially where taxpayers' money is concerned.”
Santander is in the middle of a High Court case in London over swaps it sold Metro do Porto that also ended up costing the state-owned transport group dearly. Santander is demanding to be paid what it is owed. Other banks agreed to a combined settlement last year with the Portuguese government for derivatives contracts including the one highlighted by The Independent. The government paid out approximately €1.5bn in the deal.
It also reached a legal settlement with JPMorgan over contracts it had with state companies.
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Tom Cruise: Reporters banned from asking actor about Scientology
- 3 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks traffic on Dublin road
Edward Heath 'raped 12 year-old boy at Mayfair flat'
Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Labour leadership race: Jeremy Corbyn could be the next Prime Minister, says Ken Clarke
Tom Cruise: Reporters banned from asking actor about Scientology
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...