More City scandals ‘on the way’, says minister

More scandals are set to emerge from the City of London in the future as it continues to carry “a lot of baggage” from the past, a former senior banker turned Treasury minister has said.

City minister Andrea Leadsom told the House magazine that more “cringeworthy announcements” can be expected, with the problems being more to do with lower levels of banking, rather than in the realm of corporate governance.

Asked whether the leadership of banks understand their responsibilities, she said: “I would say that at the top echelons of the banks, absolutely.”

However, she added, there is a deeper cultural problem based on a deep-rooted “transaction-orientated” approach that will take some time to eliminate – meaning there could be more problems down the line.

Reflecting over scandals concerning payment protection insurance, Libor and the manipulation of foreign exchange markets, she added: “There’s no doubt that the leaders of the City are absolutely keen as mustard to be looking much more at what they can put into society, how they can do things better, how they can make amends.”

Ms Leadsom – who spent time working for Barclays as its financial institutions director and Invesco Perpetual as its head of corporate governance and senior investment officer – added that when it was discovered that Libor was being fixed by the kind of staff who were most trusted, she was left wondering whether anything at all in the sector was safe from tampering.

Concerns at government level that the City has some way to go to ensure regulatory compliance may prompt further legislative action to curb malpractice, but Ms Leadsom’s words may at least provide some encouragement that those involved at corporate governance level are doing what they can to tackle the sector’s problems.

Andrea Leadsom took up the post of economic secretary to the Treasury in April this year, having previously served on the House of Commons Treasury Select Committee following her election as MP for Northamptonshire South in the 2010 general election.