The FCA’s sudden brakes on three probes intended to analyse and learn from the banks’ biggest financial scandals in the form of PPI mis-selling and Libor and Forex manipulations scandals had many questioning the government’s intentions. Here are three of the most popular explanations circulating in the UK today.
More than half a decade after the 2008 financial crisis, Lloyds and RBS still belong to the government. Bailed out by taxpayer money, the government’s major stakes need to be re-sold to the private sector. According to SVM investors managing director Colin McLean, it makes sense for UK Finance Minister George Osborne to make friends in the banking industry if this is what the government needs.
McLean hinted this meant giving the banks what they want, such as a PPI claims deadline.
The Threat Of Moving Headquarters
Not long ago, UK newspapers reported Osborne declaring heavier bank levies early in 2015. The levies were unheard of after several banks, including HSBC and Barclays, considered moving to Hong Kong or other countries. Banks have begun ringfencing on their businesses so as not to lose their footing in different arenas.
More Capital for Global Economy Lost
With billions lost to mis-sold PPI, the banking industry had deprived the global of much needed capital. The UK’s real economy is thirsty for new funding for innovations and exports. The scandals and fines from both local and international regulators guarantee that despite the bank’s culture of greed, funding is still halfway possible for businesses.