British Parliament votes for banks investigation
British lawmakers voted to allow a parliamentary committee to investigate the banking industry in the wake of an interest rate manipulation scandal at Barclays – rejecting opposition calls for a lengthier external inquiry led by a judge.
Following a noisy and bitter debate at the House of Commons, legislators voted 330 to 226 in favor of establishing a Parliamentary committee to carry out the study, intended to learn lessons from the rate fixing scandal.
Despite voting against the plan, and pressing for a judge-led inquiry – similar to Britain’s current media industry ethics probe – the main opposition Labour Party said it would cooperate.
Conservative Prime Minister David Cameron had wanted approval for what he called a “swift and decisive” investigation to be carried out by a joint panel of members of the House of Commons and the House of Lords.
Labour Party leader Ed Miliband has accused Cameron of failing to understand the depth of public concern about the scandal. His proposal for a longer, judge-led probe was also defeated in the House of Lords in a vote Wednesday.
“It is clear there is a wider set of questions from misselling to small businesses to the wider culture and practices of the banking industry which are outside the scope of the inquiry and cannot be properly addressed by an parliamentary committee,” Labour lawmaker Ed Balls said, following the vote.
Parliament has been stirred into action by the rate-setting scandal disclosed last week that cost Barclays bank $435 million in fines and has added fuel to public anger at the banking industry, whose executives face mounting accusations of being overpaid and unethical.
The build-up to Thursday’s vote was bitterly partisan, with lawmakers from both Labour – which held power from 1997 to 2010 – and the Conservatives, who lead the current coalition government, accusing their opponents of long cozying up to the banking industry.
Balls demanded that Treasury chief George Osborne withdraw comments made to a magazine that as a former Treasury minister Balls was somehow involved in the Barclays scandal.
Osborne responded that he would take no lessons in integrity “from a man who smeared his way through 13 years in government.”
Deputy speakers intervened repeatedly begging members to stop shouting and drowning out speeches.
In addition to the fines, British regulators also announced last week that Barclays and three other big U.K. banks had agreed to a settlement of complaints that they had sold interest-rate protection products, some of them complex plans linked to derivatives, to borrowers who didn’t understand or need them.
That has added to lawmakers’ sense of urgency.
“People want to know that crime in our banks and financial services will be pursued and punished like crimes on our streets,” Cameron said Wednesday.
Members of Cameron’s Conservative Party note Labour was in power when two big British banks were rescued by taxpayers. Miliband counters that Conservatives, including Cameron, were demanding even lighter regulation before the 2008 crash.