BOE goveror slams banking industry

LONDON, March 5 (UPI) -- Bank of England Gov. Mervyn King has chastised British banks for chasing a quick profit at the expense of their customers.

The Daily Telegraph reported Saturday that King said in an interview "imbalances (were) beginning to grow again" in the banking industry and that bankers need to steer away from strategies that "simply maximize profits next week."

"If it's possible (for banks) to make money out of gullible or unsuspecting customers, particularly institutional customers (bankers think) that is perfectly acceptable," he said.

At issue is a possibility of having banks in Britain spin off their investment divisions, a plan that Chancellor of the Exchequer George Osborne is likely to oppose, the Telegraph said.

"The concept of being too important to fail should have no place in a market economy," King said, noting that hedge funds were allowed to fail during the financial crisis that began in 2008, "but banks weren't."

Angela Knight, chief executive officer of the British Bankers' Association, said banks had "reformed radically" since the 2008 crisis and that "changes from top to bottom within the industry (since then) have ensured the risks are well controlled," the British Broadcasting Corp. reported.

"We entirely agree that no bank should believe it can fall back on the taxpayer," Knight said.