Scotland pays for Labour's regulatory failures

Here Finance Secretary John Swinney comments on revelations that Barclays had, for several years, been rigging the rate at which it borrowed money and misleading the regulators about what it was doing is a financial scandal as large as those behind the collapse of 2008.

The shamelessness and greed on show from these individuals colluding over bottles of champagne is simply unacceptable.

The impact this had on people’s mortgages is something that must be uncovered as a matter of urgency.

I welcome the fines that have been imposed but I also want to see further investigations to reveal who knew what and when, how it was possible to get away with this and which other banks were involved in this unscrupulous business.

Before I entered politics I worked for the life assurance society Scottish Amicable. I felt directly accountable to the people whose money we were looking after on a daily basis.

They were our members and our duty was to protect their investments. I felt the weight of that responsibility in every decision I made, just as I do to the people of Scotland now.

If you work in financial services you must be responsible and accountable. I firmly believe that Bob Diamond as the man responsible for Barclays’ actions should resign.

Bob Diamond has shown a thorough disrespect to his customers, to the regulators and to those whose money he was supposed to be looking after, whilst at the same time he and his traders pocketed millions in bonuses.

I have some sympathy with those calling for criminal prosecution. It is disappointing that according to the regulators the Financial Services Act put in place by Gordon Brown does not allow people to be prosecuted for this crime.

The reform of Financial Services going through Westminster right now must change this. Misleading regulators, artificially fixing lending rates and potentially defrauding the public cannot be tolerated.

It is not just Barclays and the other banks who must take responsibility for their actions. Those in power who turned a blind eye to the actions of the City have much to answer for.

Gordon Brown and Alistair Darling’s catastrophic regulatory failures are the co-author of the banking crisis and this latest scandal. We are all paying a heavy price for Labour’s age of irresponsibility and we must take every possible step to ensure this cannot happen again.

The financial services sector employs over 85,000 workers in Scotland and accounts for nearly 8% of our economy. It is a sector of many strengths but the greatest must be in putting its customers first.

Financial Services can and should be an industry we are proud of.

Our credit unions are growing, and building societies are back in fashion as safe and sensible places to invest money. Our Pensions, insurance and banking services sectors have much to offer and being responsible to the taxpayer has had a sobering effect on some of those who crossed the line.

The SNP Government is working with the industry now on a new strategy for financial services including how they can win back public trust and confidence. Scotland’s reputation as a financial centre of excellence was won over hundreds of years and it is a reputation I am determined we will keep.
Scotland can and should lead the way in building the better banking system that the public want to see.

That means greater investment in local business that need it based on a sound assessment of their finances not tick box exercises. The latest survey from the Scottish Government shows it is getting easier for business to win investment and the contact between banks and their customers is getting better but there is more to do.

Responsible banking would mean openness and transparency at every level about rates and charges and a more ethical approach to where money is invested.

Most importantly protecting people’s money must be any bank’s first priority before making profits or earning bonuses. The structure of payments for bankers should be changed to make the public the most important part of their business.

The public must be able to have complete confidence in the banking sector. Never again should our financial sector be run on champagne and greed instead of the enduring strength of customer service.

If we are to learn the lessons of the boom years then the banking collapse of 2008 and scandals like this one at Barclays must become an opportunity to build a better banking system.