30 Mar 2009
March 30 (Bloomberg) -- U.K. Business Secretary Peter Mandelson called for criticism of British banks to subside so that lenders can begin rebuilding their business and contributing to the economy.The comments were the first by a senior minister to urge a change in attitude toward banks and their executives who have been criticized for failing in their duty and rewarding themselves with excessive pay.
"The banks have received a well-deserved bloody nose from public opinion and the government and, given the impact on business and jobs, I am hardly one to sympathize," Mandelson told reporters yesterday on a flight back to London from Santiago, Chile.
Mandelson said "stronger" supervision, "fewer big bonuses" and improved corporate governance have created conditions for banks to succeed and serve the economy and British society more effectively.
"As this framework falls into place and, given a new generation of executives, banks now need space and time to get on with their work," Mandelson said. "The economy now needs them to succeed, and that is the key to getting us out of the hole they got us in."
Prime Minister Gordon Brown has said he is "angry" over excessive bank bonuses and Chancellor of the Exchequer Alistair Darling has attacked banks for triggering the worst economic crisis in more than 60 years.
More than 12,000 protestors descended on central London on March 28 ahead of a Group of 20 leaders' meeting this week to demand governments take a tougher line with banks.
G-20
Brown and Mandelson returned yesterday from a trip to South America to build support for measures to overhaul bank regulation and agreement on measures to constrain bank bonuses before the G-20 gather in London.
The British government has moved faster and further than most others in nationalizing large parts of the banking sector that faced collapse last year.
Brown has injected 37 billion pounds ($53 billion) into Royal Bank of Scotland Plc and Lloyds Banking Group Plc and insured more than 585 billion pounds of potentially troubled assets at the banks. In return, both banks have pledged to lend 39 billion pounds in this year.
With the nationalizations came the departure of senior managers, including former RBS chief executive Fred Goodwin and chairman Tom McKillop, who have faced pressure from lawmakers to return large bonuses and give up pensions.
