(Bank Of England Governor) Mervyn King: Bankers Exploit Gullible Borrowers To Pay For Their Bonuses

[Turborama]

Source: The Guardian

A fragile peace pact between the government and Britain's top banks has fractured as the Bank of England's governor, Mervyn King, delivered a scathing rebuke to top financiers for taking big bonuses while exploiting "gullible or unsuspecting" customers.

In an attack that drew an angry reaction from the Square Mile, King suggested that "imbalances" in the banking system are beginning to grow again, posing a risk of another credit crunch.

The governor, who will get broad powers to regulate the banking industry when the Financial Services Authority is abolished next year, accused high-street lenders of taking a short-term view to "simply maximise profits next week". And he asked: "Why do banks in general want to pay bonuses? It's because they live in a 'too big to fail' world in which the state will bail them out on the downside."

King's remarks, to the Daily Telegraph, are his sharpest swipe yet at banks, which had hoped that last month's Project Merlin agreement to increase small business lending would draw a line under criticism of their behaviour. The governor's comments were widely interpreted as a warning to the chancellor, George Osborne, to heed any recommendation of a break-up of big banks by an independent commission.

Read more: http://www.guardian.co.uk/business/2011/mar/05/mervyn-king-bankers-bonuses

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I think that statement can be used internationally, not just for Britain's banksters.

[jerseyjack]

1. Remember, U.S. banks that were too big to fail

are even bigger than they were then. This is because of mergers.

[aquart]

2. Duh.

[Hotler]

3. kicking n/t

[Snoutport]

4. Happening again???!!!

The scariest is that it is starting to happen again. And why not? The last batch of bankers ripped off...errrr...gave themselves bonuses that helped bankrupt the company, got a government bailout and got to keep the last bonus. why not have another one? I'm a pretty giving person, donate a lot to charity...and even I see that those giant payoffs are pretty much worth the twelve minute of government scrutiny they were given for bankrupting half the country.

CEOs are hired to do a job...they aren't kings and they shouldn't be paid as such.