British public don’t trust banks 10 years after crisis: survey

A majority of Britons do not trust banks and think they did not face severe enough penalties for their part in the 2008 financial crisis, a survey showed Thursday.

Next month will mark the 10th anniversary of the collapse of investment bank Lehman Brothers, as a bubble in the United States subprime mortgage market burst.

The poll of 2,250 adults by YouGov on behalf of campaign group Positive Money underlines the extent to which banks still have to work to rebuild public trust, despite years of restructuring and paying fines and compensation for misbehavior.

The survey found 66 percent of adults in Britain do not trust banks to work in the best interests of society.

“The finance sector takes its responsibility to wider society extremely seriously and has undertaken significant reform in the last 10 years to ensure that the taxpayer should never need to bail out a bank again,” a spokesperson for UK Finance which represents the banking industry said.

Those reforms include separating depositors’ money from riskier investment banking activity, and making senior bankers more accountable.

British banks including Royal Bank of Scotland, Barclays and HSBC had in common with US banks sold risky securities tied to home loans, and were blamed by regulators, politicians and the public for the crisis.

Banks globally have paid the price financially and reputationally, paying out more than $320 billion in fines since 2008 as regulators probed them for mis-selling securities and rigging interest rate and foreign exchange rate benchmarks.

The US Justice Department on Tuesday said RBS will pay $4.9 billion to settle claims that misled investors on mortgage-backed securities between 2005 and 2008.

The survey released Thursday said 72 percent of adults believe banks should have faced more severe penalties, despite tough post-crisis regulations which have crimped profits.