Member Article

Cable: did bankers "knowingly commit fraud?"

Vince Cable asked if some bankers “knowingly committed fraud” when selling swaps, in his speech to the Federation of Small Businesses (FSB) on Tuesday night.

The Business Secretary addressed the FSB’s Annual Chairman’s Dinner alongside the Chancellor, and came down hard on bankers.

He said: “I think you genuinely have to ask the question – did some bankers knowingly commit fraud when they mis-sold these swaps? Driven by a hunger for commission, did they think more of their gain than the small companies’ loss when persuading them to part with hard earned money?”

The basis of his speech was surely a crowd pleaser at the FSB, as Dr Cable is also pushed banks to promptly compensate small businesses for mis-selling.

He added: “No small business should pay the ultimate price for someone else’s mistake. I urge the banks to quickly and fairly compensate small companies who have been mis-sold swaps.

“I have written to the banks and the FSA already, asking them to help companies avoid going bust because of repayments.

Ahead of the evening, John Walker, national chairman of the FSB, said: “The FSA’s pilot redress scheme highlighted the severity of mis-selling with more than 90 per cent of complaints being upheld. This is a shocking figure and it is now up to the banks to make sure they give appropriate redress to those businesses that have been affected.

“I have heard first hand from members who have lost their life-times work because of these sharp practices and I hope that now we can start to draw a line under this episode. However, I fear that without the immediate suspension of payments when a business enters into the redress process that some small firms may find themselves in trouble.

“Our lobbying will not end with this report though. It is now up to the banks to contact their own customers and we want to see a concerted effort to do this so that small firms get the redress they deserve quickly.”

This was posted in Bdaily's Members' News section by Tom Keighley .