Mortgage News
Carney slams Lloyds scammers for potential criminality after cheating taxpayers
Bank of England governor Mark Carney has said the Lloyds staff involved in the fee scam to defraud taxpayers revealed yesterday could be guilty of ‘criminal conduct’.
The UK’s biggest mortgage lender Lloyds was uncovered for fraudulently ripping off the Treasury during the credit crunch for misrepresenting its creditworthiness.
The state-backed bank then gained access to tens of billions from a Government bailout scheme at favourable rates but which left taxpayers out of pocket.
Between April 2008 and September 2009, four traders cut £7.8m off the fees Lloyds paid to the Treasury by manipulating the ‘repo rate’ which set the fee charged.
Lloyds was fined £218m yesterday, but a senior MP said the public did not understand why rogue bankers had not been jailed.
A letter from Carney to the Lloyds chairman revealed the governor’s fury.
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Carney wrote: “Such manipulation is highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved.”
He added that ‘in view of the seriousness of this matter’, the Bank will consider pursuing further action against Lloyds and the individuals involved.
Lloyds also faces a possible investigation by the Serious Fraud Office.
Lloyds Banking Group chairman Lord Blackwell wrote back to Carney, saying: “We are still in the process of settlement discussions with the FCA (and indeed on the Libor issues with the CFTC and the DOJ as well.) In the course of this we are considering the implications for the individuals involved.”
He continued: “I absolutely share your concern about the SLS conduct and in particular its implications for reducing fees. This was truly shocking conduct.”