Britain's biggest banks "rip off" their customers in order to make "excess profits",

<p>The Business Secretary claimed bank branch staff were more interested in earning bonuses for selling products than helping customers and that lenders had allowed their relationships with small businesses to wither.<br />"Competition is the best antidote to the rip-off culture which is ingrained in the banks… extracting excess profits from customers," said Mr Cable, speaking at a banking industry reform debate.<br />"There is a cultural issue and there are two practical aspects to it. If you have people in branches who have a personal incentive to sell products that cuts across the traditional relationship. The other aspect of (that) culture, is most of the banks became very, very detached from local relationship banking and they do acknowledge that and some banks are trying to get back to that."<br />Mr Cable also took a swipe at the Continental model of banking, and accused France and Germany of hiding problems in their own financial systems.<br />"I am slightly nervous about the idea that we should regard the French and German banks as role models. One of the problems of the past few weeks has been the extreme reluctance of their governments, banks and the European Central Bank to face up to the need to take losses on their Greek debt and they still haven't faced up to the magnitude of the problem because they are worried about the vulnerability of the banking sector."<br /><br />Mr Cable's comments precede the September 12 publication of the Government-appointed Independent Commission on Banking's (ICB) report, which will recommend a series of reforms for the industry. The Business Secretary is a member of the Cabinet banking committee that will decide which of the ICB recommendations to enact and therefore his comments yesterday will worry those in the industry that fear radical changes.<br />At one point, Mr Cable appeared to suggest the Commission's proposal to ring-fence the UK retail operations of banks could be used to effectively dismantle banks like Barclays and Royal Bank of Scotland that operate a model based on an integrated retail, commercial and investment banking model.<br />"Will the ring-fence be high enough and the Chinese walls strong enough to ensure that nothing resembling a universal bank remains?" asked Mr Cable, as he set out the tests by which the Government would appraise the ICB's proposals.</p><p> </p>

Britain's biggest banks "rip off" their customers in order to make "excess profits",

The Business Secretary claimed bank branch staff were more interested in earning bonuses for selling products than helping customers and tha...

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