Banks are trying to maximise short-term profit at the expense of customers, the Bank of England governor has said.
In a Daily Telegraph interview, Mervyn King questioned the bonus system and warned that failure to reform the sector could result in another financial crisis. BBC correspondents say the remarks are significant because the Bank of England is taking over regulation.
Banking chiefs said they “respected” Mr King but disagreed with his comments. BBC business editor Robert Peston said the interview showed Mr King had “little respect” for the banks.
His remarks come weeks after Chancellor George Osborne signed Project Merlin.