Nick Clegg

Nick Clegg

3 July 2012. Nick Clegg, the deputy prime minister said that the banking sector has become a “source of embarrassment”. He added that the system had gone “horribly, horribly wrong” and needed reform.

Clegg added, “The banks used to be the jewel in the crown of our country and now they’re a source of embarrassment and shame. And I think people need to take responsibility for the things that went wrong because they went horribly, horribly wrong.”

The government is proposing to set up a committee of peers and MPs to examine the industry with a view to change the law. The committee will examine issues of “transparency, conflicts of interest and the culture and professional standards of the financial services industry including the interaction with the criminal law”.

But many believe that a full scale pubic inquiry – like the Leveson inquiry – is needed to reform the banking sector. Chancellor George Osborne said that a full public inquiry would be too costly and time-consuming, arguing that the committee of peers and MPs would have “enough time to do the job and do it well, but not so long that it drags on for years”.

Barclays Chief Executive Bob Diamond resigned with immediate effect and will appear before MPs on the Treasury Committee on Wednesday, followed by Chairman Marcus Agius on Thursday. Agius still intends to stand down once a new chairman has been chosen, a spokesperson at Barclays said.