UK central bank head: Banks in denial, need restructuring

Bank of England governor Mervyn King has launched a stinging attack on British banks, stating the industry has failed to heed “very real and wholly understandable” public animosity towards them.

King (pictured) said banks are in denial over their failure to deal with the financial crisis, with  their lack of remorse the main factor behind the public’s growing resentment.

Speaking to the Sunday Times King said the industry has failed to ‘face up’ to their own failures, following another round of bumper payouts to bank bosses in the last few weeks.

King notes public anger towards bankers’ bonuses comes at a time of austerity for the majority of the country, when many are being told to cut back in the face of rising bills and shrinking or stagnant wages.

“I think it is because they (bankers) found it very, very difficult to face up to the failure of their banking model,” he told the Sunday Times.

“That model needs to be restructured.”

He added market discipline cannot apply to everyone except banks.

His comments come shortly after Barclays revealed its boss Bob Diamond received £17m in pay and shares in 2011.

 

This article was first published on Investment Week

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