The Banking Crisis Mark II

This truly has been the worst week for the banks since 2008. So far this week RBS has had problems with customers’ accounts, Barclays has endured the LIBOR scandal and now all four big banks (RBS, Barclays, HSBC and Lloyds) have been found guilty of miss-selling complex financial products to small businesses.

The miss-selling scandal has caused many small businesses serious trouble as they struggle to keep up with payments to the banks. The City watchdog has now instructed the banks to cancel any contracts that were miss-sold and reimburse some businesses if necessary.

Worse thing is this new banking crisis is still not over; American and British investigators are still looking in to the LIBOR scandal. They believe that it was not limited to just Barclays; this could be a sector-wide scandal encompassing many banks.

Today Vince Cable has called for a criminal investigation into the scandal at Barclays, commenting in an interview with Sky, Cable said “They [the public] just can’t understand why people are thrown into jail for petty theft and these guys just walk away having perpetrated what looks like a conspiracy.” The business secretary also said that he believed the public would back a criminal investigation as the banks are increasingly unpopular.

The Prime Minister has rejected a call from Labour to call a Leveson-style inquiry into the banking sector, believing it is not necessary. But don’t give up hope! He also said there would be no inquiry into the press and look how that turned out. Personally I agree with Labour, there should be an inquiry. I believe the Leveson Inquiry has been a success, it has shown the public all the bad things the press have done. Now imagine what a banking inquiry would do! Ordinary people are directly affected by banking; almost all UK adults will have multiple bank accounts. We should know what the banks are doing with our money, the risks they are taking and the devious schemes through which they try to make money. We need a banking inquiry as soon as possible, to try and stop “bad banking” and help “good banking” to thrive.