Vince Cable says George Osborne 'lacks motivation' to crack down on banking abuses

Cable made the comments after an inquiry into banking culture was scrapped by the FCA

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The Independent Online

Sir Vince Cable has said that the Chancellor George Osborne lacks motivation to crack down on banking abuses.

"I do worry that the Chancellor no longer has the same motivation to make the banking sector work for Britain," Cable told Sky News.

Cable said that bankers are "being listened to" and their complaints being taken on board. "A blind eye is being turned to abuses in the banking sector," he said.

Cable made the comments after an inquiry into banking culture was quietly scrapped by the Financial Conduct Authority months after it was launched.

The FCA said it scrapped the report because a Banking Standards Board has since been set up to look at the culture within banks on an on-going, one-by-one basis.

But many said that the FCA's decision related directly to the sacking of former chief executive Martin Wheatley - who was seen to take a hard line on banking abuses - and HSBC's decision to review the location of their UK headquarters, which put pressure on the Government to ease off on banking regulation.

Cable told Sky that the coalition years, in which he and Osborne had worked together as Chancellor, had brought much tougher rules to bear on the banks, including requirements to hold more capital and reforms to split investment banks from retail banks through ringfencing.

"What's happened now is the balance has gone," he said.

"This is the dangerous time. When there isn't an immediate threat to the system, the pressure goes off, bad practices creep back in, there is excessive risk taking and abuse in the investment banking side."