Regaining trust in banks 'years away', says Andrew Tyrie

Image source, MPSinthesky
Image caption,
Mr Tyrie said cultural change at financial firms was slow

Regaining public trust and confidence in banks is still years away, the chairman of the Treasury Committee, Andrew Tyrie, has told the BBC.

Despite a raft of new rules designed to rein in bad practice, a culture change at banks has a long way to go, he said.

"My impression is that the spirit is willing, especially at the top, but sometimes the flesh is weak," he told Wake up to Money.

Mr Tyrie said a lack of confidence in banks was hurting recovery.

Some small firms were wary of asking banks for loans and advice because they felt that dealing with financial institutions was still risky, and that was hindering growth, he warned.

He said: "Confidence has been badly shaken needs to be re-built. That's a big job and its not going to be done in a year or two. It's a job that will need to take place over many years."

His comments come six years after the banking crisis exposed how firms had misled customers and engaged in illegal activities, sparking huge fines from regulators.

Media caption,
Andrew Tyrie tells 5 live: "It's not going to be done in a year"

Mr Tyrie and his committee have been at the forefront of grilling banking executives and regulators on the causes of the financial crisis and measures to ensure there is no repeat.


But despite regulations and sanctions, reforming the financial sector was a slow process.

"These are very large institutions and they are finding it difficult to get the trickle down of the new management approach," he said.

He also said that financial regulators needed to up their game. "They need to exercise much more judgement than just do a bit of box-ticking and then go home - box ticking which they think will cover their backs."

"We need to get to a fundamentally much better place where people can rely on high quality advice, where they will start to trust financial institutions again," he said.

In response the British Bankers' Association (BBA) said the industry would agree with a lot of what Mr Tyrie said, but added that things are improving.

BBA spokesman Robert Watts told the BBC: "Many products were mis-sold, many people were rewarded for failure, and the taxpayer was left to pick up the tab.

"We've got new regulators who are tougher and stronger. But it takes times for customers to recognise that there has been change."