Baroness Kramer calls for ‘disinfectant’ from building societies

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A SENIOR member of the Parliamentary Commission on Banking Standards has urged building societies to be part of the “disinfectant” to mend the excesses of the banking sector.

Baroness Kramer told a meeting of building society chief executives yesterday that, by contrast, their organisations had the public trust to help “keep communities going”.

Kramer said: “The sector needs to get on the front foot after a generation of being on the back foot and not doing what the so-called ‘sexy’ bankers were doing.”

Chancellor George Osborne this week called for “upstart challengers” to take on Britain’s big five clearers. But Liberal Democrat peer Kramer said already established building societies, with their more-conservative lending practices, were a “natural disinfectant” for the tarnished financial sector.

The commission is investigating the culture and standards of the UK banking industry and has won Osborne’s support for an “electrified ring fence” between the big banks’ high street and investment banking businesses.

Against this backcloth of continued public hostility to the main banks, Kramer said: “My encouragement to you is ‘carpe diem’ – seize the day.”

Those present at the Building Societies Association (BSA) event in London included: David Webster, chairman of the BSA; Adrian Coles, BSA director-general; Stephen Mitcham, chief executive of Cambridge Building Society; David Cutter, head of Skipton Building Society; and David Marlow, chief executive of the Nottingham building society.

Webster said the sector wanted to be more proactive and was well removed from the stereotype of “a sepia-tinted set of organisations with a degree of reluctance to change”.