By Huw Jones LONDON, Jan 9 (Reuters) - The public face of Britain's banksduring the financial crisis considered resigning several timesover her members' fight against compensating customers mis-soldloan insurance. The British Bankers' Association (BBA) mounted the challengein 2011 against principles from the Financial Services Authority(FSA) on how lenders should contact customers about themis-selling of payment protection insurance (PPI). Angela Knight, CEO of the trade body at the time, said shehad been against going to court, preferring faster ways ofagreeing a common approach to compensation. She was worried about political consequences if the BBA won,saying her unease was well known inside the UK trade body. "I thought of leaving the BBA on a number of occasionsbefore I did," Knight told a UK parliamentary commission onbanking standards. "Sometimes you will hold your nose and go through the lobbyon the basis you can sort it out better than to say 'No, I amgoing elsewhere'," she told the panel of lawmakers. The commission is expected to recommend legislative changesto help regain public trust in the UK banking sector. Loan insurance mis-selling is Britain's biggest retailfinancial produce scandal, with banks such as HSBC,Barclays, Lloyds and RBS having setaside a total of 12 billion pounds ($19.2 billion) to covercompensation. Knight defended the banks during her five years at the helmof the BBA from April 2007, near the start of a financial crisisthat triggered public anger over taxpayer bailouts of banks andthe bonuses they paid top staff. "It made it difficult to go to the pub for a drink or travelon a train as people recognised me," Knight said. NO IDEA She left in July last year just after Barclays became thefirst bank to admit rigging the Libor interbank benchmarkinterest rate. A second British bank, RBS, could settlesimilar charges in coming weeks. "I did not know it was coming. I only knew when it hadarrived. I had no idea it was going to land," she said of theBarclays settlement. Libor is overseen by the BBA, which is being stripped ofthis role as part of a review of how it is compiled. Knight had "no inkling whatsoever" that traders at differentbanks were contacting each other to rig Libor. "I was absolutelyappalled that was the case," she said. MPs challenged her for not barring BBA members for bringingthe industry into disrepute, given the PPI and Libor scandals. Knight said she had made "very pointed points" to somebankers and asked for some people to be changed, but had decidednot to go public on this. Speaking at the same hearing, Peter Vicary-Smith, head of UKconsumer lobby Which?, said the FSA had been slow to tacklemis-selling and was too close to the industry at that time,though this had changed. Some banks were still "obfuscating" over compensation,Vicary-Smith said, though he singled out changes at Barclays as"impressive". Mis-selling of products would only end when they were betterdesigned, with inappropriately high margins stopped and curbsslapped on high-pressure sales tactics and bonuses, he added. Knight agreed there had been a "detachment from customers"at some banks, but as the financial crisis unfolded the toppriority for some lenders was survival. The FSA is changing how products can be sold and from Aprilits successor body can ban products that harm consumers.
Last checked at 
