Turner vows to act if FSA finds new mis-selling
THE CHAIR of the FSA, Lord Turner, has assured MPs that if the watchdog finds “widespread evidence” that banks have been mis-selling financial products to small firms, “we will take action”.
His warning came as the Treasury Select Committee kicked off an inquiry into corporate governance, particularly in banks.
At a hearing yesterday, Lib Dem John Thurso MP unleashed a diatribe blaming bank chief executives for an “immoral” practice of mis-selling interest rate swaps.
Thurso said he believes it stems “from the decision at the top to go for an unrealistic return on equity for providing what should be a basic utility for business to grow”, calling it a “despicable culture”.
However, the FSA and Financial Ombudsman said there is as yet no clear evidence of how widespread the practice is.
Sir David Walker, senior adviser to Morgan Stanley, told Thurso in response: “I basically agree with you.” The FSA is currently conducting an investigation into practices surrounding the sale of financial products to small businesses, some of which have ended up costing small firms hundreds of thousands.
MPs are also looking at diversity on boards. Andrea Leadsom, a Tory MP, claimed male bank bosses are more “aggressive” than women, saying that female executives display a more “mea culpa attitude” when things go wrong.
By contrast, she claimed the male bank executives’ attitude was “not our fault, don’t blame us, just keep paying us”.
The Financial Reporting Council’s Peter Montagnon called her summary “dangerous stereotyping”.