Business leaders this weekend expressed major concerns that the wave of banking scandals could permanently damage the status of London as the world’s greatest financial centre.
The Barclays Libor fixing, mis-selling of interest rate hedge products, JPMorgan’s “London Whale” losses and Royal Bank of Scotland’s computer meltdown have sent the City’s global reputation to a new low.
Politicians in Washington DC highlighted the threat to Britain’s supremacy in financial services last week, accusing London of being a hotbed of wrongdoing for investment banks.
The City of London Corporation, which represents the interests of the financial community in the so-called Square Mile, admitted to The Independent on Sunday that it was seriously concerned about the reputational damage, particularly from the Libor fixing scandal. Policy chairman Mark Boleat said: “Recent events are clearly bad news for the international reputation of London and play into the hands of our critics both at home and abroad. It is extremely unhelpful as we try to rebuild confidence in the City and our regulatory regime.”
He joined the queue of leading figures calling for individuals to be called to account. “To prevent this happening again we need continued effective supervision and enforcement, not simply more regulation. We need to restore a culture where ‘doing the right thing’ is viewed as important as obeying rules,” he said.
The Institute of Directors has called for a “clear-out” of top bankers to staunch the continued outpouring of reckless and immoral behaviour from the big financial firms.