In the wake of financial scandals, big banks declare their culture is changing, but critics say genuine reform is easier said than done

Sub-prime mortgages, predatory lending, complicity in money laundering, mis-selling of payment protection insurance, manipulation of interbank-lending rates, excessive charges, and the “London Whale”: since the roof fell in during the 2007-8 financial crisis, the charge sheet listing the banks' crimes and misdemeanours has just kept growing.

The sums involved are eye-watering. Jérôme Kerviel, for example, the former Société Générale trader, racked up €4.9bn in losses from unauthorised transactions by the time he was uncovered in 2008, dwarfing the £827m famously lost by Nick Leeson in the 1995 collapse of Barings Bank. The 2012 losses of JPMorgan Chase trader Bruno Iksil, aka the London Whale, amounted to $6.2bn. Payment Protection Insurance (PPI) mis-selling has so far cost the banks a staggering £22bn.

These losses and the fines levied on banks – such as the $1.5bn paid by UBS for manipulation of the Libor interbank lending rate – divert money that could be used to fulfil the basic role banks should be performing: keeping the wheels of the economy oiled through lending, in particular to small and medium-sized businesses that have the potential to grow and create jobs.

Banks need to refocus on small businesses
 

Banks are often accused...

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