March, 18, 2010

Banks should not be allowed to continue chalking up very high margins after "gouging" customers for years, Britain's financial services minister said on Thursday."The banking industry has enjoyed more public subsidy than any other industry in our economy," Paul Myners told a hearing on the future of the banking industry."It should not be able to sustain a return on equity of over 20 percent," the former fund manager said.

An investor in bank shares over the past decade would have lost money but a trader working for a bank would have made millions, Myners added.The global Basel Committee of central bankers and supervisors from the G20 group of leading countries is thrashing out tougher bank capital rules to apply lessons from a crisis that forced Britain to spend billions shoring up banks.Myners said Basel must take care in finalising and phasing in of its new rules to avoid harming economic recovery.

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