Exclusive: PPI Bankers Face Public Grilling
The bankers responsible for one of Britain's worst mis-selling scandals are to be interrogated publicly about the sales culture that artificially inflated industry profits by billions of pounds.
I have learned that Britain's major banks have been ordered to submit the names of executives who were directly responsible for devising payment protection insurance (PPI) sales practices during the first half of the last decade.
Lenders including the state-backed Lloyds Banking Group and Royal Bank of Scotland (RBS) were told that the lists should include the names of former executives, even if they left the banks' employment many years ago.
The Parliamentary Commission on Banking Standards (PCBS), which is headed by the Conservative MP Andrew Tyrie, who also chairs the Commons Treasury Select Committee, is understood to have fired off the demand in the last few weeks.
In most cases, this will be the first occasion on which those directly involved in PPI mis-selling will have been held publicly accountable for a scandal which has grown in terms of public prominence and financial impact during the last two years.
To date, Britain's big four banks have had to set aside more than £10bn for PPI mis-selling, with Lloyds leading the way with a bill for £5.3bn.
The Bank of England's Financial Stability Report in November raised the prospect of another £10bn being added to the industry's compensation bill.
Among those who face being called as witnesses by the PCBS will be Gordon Pell, the former deputy chief executive of RBS, who was one of the key retail bankers during Fred Goodwin's reign at the Edinburgh-based group.
The major banks have also been asked by the PCBS to answer a series of questions about PPI, which has become an emblem of the egregious sales practices which became commonplace across the sector.
Several bankers suggested that the PCBS "risked becoming a show-trial" but accepted the need for public accountability
Some of the worst culprits stopped selling PPI policies several years ago, meaning that clawing back bonuses from executives involved in the practice has been legally impossible. Clawback has only become established as a feature of bankers' employment contracts since the financial crisis.
Later this week, the PCBS will hold an evidence session with consumer groups about bank mis-selling, with witnesses from the big lenders likely to appear in the next few weeks.
None of the banks would comment on Monday.