Cameron: The City will face its reckoning

Irresponsible bankers and businessmen will face their day of reckoning, Tory leader David Cameron has said.

In a speech in Canary Wharf the Tory leader called for a more stringent system of policing those in the City and reform of bonuses system.

“I want to talk about the promise I made at our party conference in Birmingham a few months ago,” Mr Cameron said.

“It is fair and reasonable that those responsible are held to account for their behaviour and that we show clearly that in this country, there is not one rule for the rich and a different rule for everybody else.

“Justice is only effective when it is seen to be done,” Mr Cameron continued.
“For the thug locked up for mugging people on the streets to the highest executive in the biggest firm who’s been swindling the books.”

Mr Cameron said there was no need for further laws on corporate wrongdoing but called for the Financial Services Authority (FSA) to launch more criminal investigations into financial crimes.

“This is not, at root, about more legislation. The laws are already there. Rather, it’s about implementation and law enforcement,” he said.

In the last twelve months the FSA has brought four cases to trial, only one of which related to the present crisis.

Mr Cameron said he wanted a full investigation into the events which created the current crisis with authorities given full powers to “pursue financial wrongdoing”.

He also called for an overhaul of financial regulation, with the tripartite system (the FSA, the Bank of England and the Treasury) coming under particular scrutiny.

Under the Tory administration the Bank of England would write regularly to the FSA on the sustainability of debt levels with the FSA being asked to take the level into account when setting the amount on capital individual bans must hold.

On bonuses, Mr Cameron said: “Bonus culture encouraged short-term risk-taking instead of rewarding the long-term interests of shareholders and the public.”

The Tories would give the FSA power to make institutions that use massive bonuses to encourage short-term gambles hold more capital to offset their higher risks.

Ian Pearson, Labour’s Treasury minister, said: “Cameron’s words can’t cover up the fact that he is committed to repeating the do-nothing mistakes of the past.

“The government takes all forms of crime seriously, including financial crime. For example, we are giving the FSA new powers to plea bargain with employees to help the FSA police the City, and extended the scope of the FSA in 2004 to cover mortgages.”

It is the latest in a series of economic speeches Mr Cameron has made in recent weeks but polls show no change in the public’s view of the Tory performance since the financial crisis, with a recent Ipsos Mori poll putting Gordon Brown well ahead on the issue.