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Cameron calls for crackdown on wrongdoers in the City

Conservative Leader David Cameron has called for a thorough investigation to root out wrongdoing in the City that may have contributed to the credit crisis.

Speaking in London this morning, Cameron said the Government was primarily responsible for the economic crisis, but said that recklessness and poor decision-making in the City should be investigated and punished.

Cameron said the US authorities are ensuring “no stone is left unturned” in their search to uncover possible mortgage fraud, insider trading and misinformation in the financial markets, and the UK should be following suit.

He said the fact our Prime Minister is not pursuing financial wrongdoing to the same extent is “a failure of moral leadership”.

Cameron said it is crucial that the FSA has the “teeth to do its job properly”, highlighting the lack of prosecutions in the UK, and repeated the Conservative’s call for an increased levy on the City to pay for high quality supervisory staff, as well as secondments of staff from the banking sector to support the regulator.

The prosecution of Enron management and Nick Leeson in the Baring’s bank affair both serve as examples of how punishment can act as a deterrent to financial crime, he said.

Cameron said: “The US response has been clear. To root out any wrongdoing, and punish it proportionately.

“Our response has not been so clear. There seems to be neither the will – nor the means – to bring those who may be responsible for wrongdoing to account, despite the fact it is scarcely plausible that the things that happened in America did not happen here.”

He added: “… When I see working people paying through their taxes to bail out a banking industry which as imploded under the weight of its own irresponsibility, I believe we owe it to them to investigate thoroughly what exactly happened in this financial crisis and to do all we can to stop it happening again.”


End the bonus culture at banks

Sesame wants the FSA to create a level playing field by taking away bonus structures for bank staff who sell products, alongside moving advisers away from commission.

Interaction stations

Apparently, the FSA is unhappy at industry reaction to the RDR feedback statement. They appear to be suggesting that by not pleasing any particular sector, they have created an acceptable balance. Evidently, they choose not to consider the other possibility – that such antipathy denotes an awareness that the proposed actions cannot achieve the desired outcomes.

libor spread still too high for lenders

Three-month Libor has dropped to 3.13 per cent, a fall of 75 basis points since the start of the month. Mortgage lenders welcome the drop but say the 1.13 per cent spread is still too much to improve rates drastically.


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