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‘Banks made astonishing mess of system,’ say MPs

Banks have been the principal authors of their own demise, according to a damning report from the Treasury select committee released last week.

The report, entitled, Banking Crisis: Dealing With The Failure Of The UK Banks, is the TSC’s second report into the banking crisis and finds that bankers have made an “astonishing mess” of the financial system.

TSC chairman and Labour MP John McFall says: “The banks have failed to govern themselves effectively. Senior managers failed to understand the investments made in their name, risk management and due diligence were seemingly ignored and the non-executive directors failed in the proper scrutiny of the banks’ activities.”

The report says governments, politicians, regulators and central bankers in the UK and across the world also played a part in the economic crisis and that the FSA must create a more durable framework for finance regulation.

British Bankers’ Association chief executive Angela Knight says: “If we simply continue to blame the industry for all the problems of the economy in the UK, it will do little to help us out of the recession.”

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