Bank of England Governor hits out at 'banking culture'

THE Governor of the Bank of England and the high-street banks he polices were on a collision course last night after he accused them of putting short-term profits at the expense of customers.

Mervyn King said banks failed to nurture long-term relationships with customers, and picked on vulnerable clients.

"If it's possible to make money out of gullible or unsuspecting customers, particularly institutional customers, that is perfectly acceptable," he said of the banking culture in the UK.

A second banking crisis was feasible, he added, as "imbalances" in the system again begin to grow.

The country had yet to solve the "too big to fail" dilemma, where governments face no choice but to step in to bail out a bank which could bring the entire economy down with it.