Archbishop of Canterbury warns of 'lynch mob' out to blame bankers

But Justin Welby also says it is unacceptable that top executives deliberately made sure they did not know what was going on so they could plead ignorance

The archbishop of Canterbury, Justin Welby, has described blaming individuals for the banking crisis as "lynch mobbish". But the archbishop, a member of the parliamentary commission on banking standards, also said top bankers had avoided responsibility by ensuring they did not know what was going on in their banks.

"Certainly one of the trends that has been very unfortunate, to put it mildly, is that in some financial services companies there was a clear policy of not telling the top people. They made sure they weren't told things, because then they could plead ignorance, and that's just unacceptable.

"But this business of somehow saying that one individual bears the whole blame as opposed to simply the accountability – it feels lynch mobbish."

The archbishop was speaking to the bishop of Liverpool for a BBC Radio 4 documentary to be broadcast on Monday night, in his first public comments on the banking industry since the parliamentary commission published its damning report in June. The cross-party commission, led by Conservative MP Andrew Tyrie, made more than 80 recommendations, from introducing a new criminal offence to make it easier to send reckless bankers to jail to getting more women on the trading floor.

Justin Welby worked as an oil executive before he became a priestIt also accused senior bankers of evading their responsibilities by closing their eyes to what was happening on the front line.

Welby told the BBC he felt some sympathy for banking executives and admitted he was not sure he would have behaved differently had he been in their place. Welby also described the tensions between his faith and the business world when he worked as an oil executive, before taking orders.

"What I remember is the sense that the culture and values of the financial world enveloped you and began to shape one into a new ethical shape," he said. "You were aware that you were struggling with this and often rather frightened by what was going on."

The bishop of Liverpool also spoke to Antony Jenkins, chief executive of Barclays, who said he was not convinced that a criminal offence of negligence within the financial services industry would solve the problem.

"The biggest driver of change in the behaviours of banks has to come from within the banks themselves – they have to come to a realisation that they will be better businesses commercially and ethically if they change their behaviour."

Article Source : http://www.guardian.co.uk

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Current account switches made easier as banks plan media blitz

Government promotes new £750m IT system that allows customers to swap banks quickly to promote competition

A cast of animated characters will hit television screens in September as part of a campaign by the banking industry to encourage customers to switch bank accounts.

They will also appear in newspapers, magazines and on billboards as banks strive to prove that they do not need a full-blown competition inquiry to get customers to move current accounts.

Under instruction from a government keen to foster competition on the high street, the banks have spent £750m designing a new computer system that allows them to speed up the time it takes to shift current accounts between each other. The change could break the stranglehold that the big four – Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC – have on the current account market.

Such is the sensitivity around the programme and the determination to ensure it is not accused of being behind schedule that the payments council, which is overseeing the process, refuses to disclose when the switching service will begin. But the 30 banks and building societies participating in the project are embarking on last-minute system tests to allow the service to begin on 16 September. The service guarantees that accounts can be transferred in seven days without glitches.

On Monday the payments council wrote to the government to reaffirm that it is on track. Any suggestion that the project is falling behind schedule is quickly quashed by bankers amid rumours that banks have back-up systems where they deploy staff to change direct debits manually. One senior banker said: "We have so little credibility left, this is going to be a big chance to put it right."

The plans hope to encourage customers to move accounts and make banks offer a better serviceThe switching service was spun out of the review by Sir John Vickers in his independent commission on banking, which found there was little movement between customers of the big four, which have a combined market share of 80%. It allowed the banks to head off a move to account portability – more akin to moving a phone number between mobile phone providers – which they argue is expensive.Last month's parliamentary commission on banking standards put portability back on the agenda and the government will commission a new review next year.

A functioning switching system will be the banks' main defence against portability. This government is not the first to try to bolster competition. More than a decade ago Labour tasked Don Cruickshank, former head of the then telecoms regulator, with investigating the banking industry and he, too, highlighted the problem. Since then the business has become even more concentrated in the wake of Lloyds' rescue of HBOS, the main challenger, five years ago.

Ian Gordon, banks analyst at Investec, said: "It has been an objective for ever, with limited success. I see this as a means to attempt increased portability of current accounts. Whether it will succeed I'd be a little bit sceptical because of entrenched consumer behaviour."

Motivating customers to move accounts could be one way to change behaviour. However, a statistic bankers often quote is that people are more likely to divorce than to switch the provider of an account into which salaries are paid and direct debits paid out. Bankers acknowledge there is a danger that customers end up moving their accounts among the big four, doing little to change the market share the government is trying to break, unless new-style products are brought to market. Lloyds will itself inject a new entrant into the market in early September when it spins out TSB – demanded by the EU in return for £20bn of taxpayer money pumped into Lloyds in 2008 – after a sale of the business to the Co-operative Bank fell through. RBS is also carving out a branch network at the behest of Brussels because of its £45bn taxpayer bailout.

Others such as Tesco Bank are not joining the switching service at this stage, but are expected to join a second wave of participants. A spokesperson for Tesco Bank said: "We plan to join the second wave of testing for this service in November 2013, which is expected to support a launch of the product in 2014." Norwich & Peterborough, which is the only one of the second-tier building societies to offer current accounts, has also said it is not taking part in the September launch, but hopes to join the scheme in the future.

However, Sir Richard Branson's Virgin Money is also taking part in the switching service, even though it does not have current account products in its range. Tesco expects to launch a current account next year, but Virgin could have one on the market before year-end.

To encourage customers to shift, the banks may need different products. The big four largely offer free in-credit banking and would face a public backlash if they started to charge for transactions. First Direct, an arm of HSBC, is offering cash rewards to new customers. Nationwide building society is also aiming to win new business through a big push of its existing products. Others may charge for their service. When Marks & Spencer launched into banking, every current account was an "added value" packaged account – offering add-on services – charging £15 to £20 a month. The payments council has told the government it will judge its success on the level of awareness and consumer confidence in switching. But it refuses to set a target. In 2009, around 600,000 accounts were switched, and the total doubled to 1.2m last year.

Article Source : http://www.guardian.co.uk

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UK exports at their highest since recession, say firms

• Survey finds growing confidence as sales rise
• Official data expected to show growth accelerating

UK exports are at their highest since the recession, according to a survey out on Tuesday that will fan hopes the economic recovery is picking up pace.

Activity has picked up, exporters are more confident about sales growing and more expect to hire staff this year, according to a report from the British Chambers of Commerce (BCC) and postal group DHL. The news comes ahead of official data on Thursday expected to show overall economic growth accelerated in the second quarter of the year to 0.6%, from 0.3% in the first three months.

Tuesday's report suggests exporting activity is at its strongest since the BCC/DHL trade confidence index began in autumn 2007.

That will bring some cheer to George Osborne. The chancellor has been espousing a rebalancing of the economy towards manufacturing and exports but the official data has yet to show any evidence of such a shift.

The BCC said that for the first time its survey results were positive "across the board" and that manufacturers and services firms were enjoying rising demand.

"Export sales and orders have gone up, confidence is high and expectations around profitability have increased. Even more businesses have taken on staff this quarter, with many expecting to hire again next quarter," said the BCC director general, John Longworth.

The survey of more than 1,700 businesses suggested export orders for services firms were growing at a record pace while manufacturers were enjoying their strongest orders growth for more than a year.

The BCC calculates its exporting activity index from the volume of export documents it issues to businesses and said the measure had risen 2.8% from the first quarter and was 2.9% higher than in the same quarter last year.

More than half of exporters (51%) believe that their profitability will increase this year, and 60% believe they will see an increase in turnover.

In its latest release on UK trade, the Office for National Statistics said the value of UK exports had remained flat since mid-2011.

Most economists said the official data showed little sign of the desired rebalancing toward net trade.

Longworth said that despite the BCC's findings there was still more the government could do to help companies sell overseas, including giving more support to those going to trade shows.

"We mustn't take our foot off the gas. We still need more companies to take the plunge on international trade and for those who export already to try to diversify into new markets," he said.

A container ship leaves Southampton: the survey of more than 1,700 businesses suggested export orders for services firms were growing at a record paceWhile the official GDP data this week is expected to show some pick-up in growth, economists have warned that the second quarter news from manufacturers was mixed, while the squeeze on incomes is likely to have weighed on consumer spending and will continue to do so over the rest of the year. Inflation has outstripped average wage growth for more than three years.

But business surveys have generally been upbeat and the Bank of England did not feel the need this month to step in with more quantitative easing.

A separate report on Tuesday suggests fewer businesses are struggling to stay afloat, with the number of insolvencies falling in June. The measure recorded an annual fall for the second month running to 1,560, down from 1,675 in the same month last year, according to credit data specialist Experian.

The majority of UK regions -- eight out of 11 -- showed continued improvement with a drop in their insolvency rate and Scotland had the lowest rate overall. Small to medium sized businesses, which suffered the most during the recession, performed well in June, Experian said.

"This is good news overall – we've already seen several months of low but level insolvency rates and the fact they have come down further indicates that firms are operating with more confidence than in recent years. However, as businesses start to think about growth and companies start to restock and rehire, the insolvency rate could well go up as cash flow becomes an issue," said Max Firth at Experian business information services.

Article Source : http://www.guardian.co.uk

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