Minister: Bankers' reputations tarnished beyond repair

The reputation of bankers has been tarnished "seemingly beyond repair" by the financial crisis, City minister Lord Myners said today.

The minister said taxpayers were "justifiably angry" at the billions spent on rescuing banks which "got rich by taking reckless gambles".

His comments come after the Chancellor announced a one-off tax on bonuses to raise an estimated £550 million from banks which have profited from the interventions.

Speaking at an event at Westminster, Lord Myners said: "The Government, including myself, have at times been frustrated with the level of resistance to reform we have seen from the industry.

"And bankers, the vast majority of whom were not to blame for the recklessness of a few of their peers, have been saddened as the reputation of their profession has been tarnished seemingly beyond repair."

The minister made "no apology" for the action taken by the Government, but said the anger and frustration at previous excesses should not distract from the task of repairing the sector.

"I know that's something banks want to support - a discussion that is more constructive, more practical, and more genuinely focused on ambition for the future and not anger about the past," Lord Myners added.

Earlier this month the National Audit Office estimated the total taxpayer exposure to the banking sector through bail-outs and guarantees at £850 billion.

Chancellor Alistair Darling said last week estimated losses from rescues - such as taking an 84% stake in Royal Bank of Scotland and a 43% share in Lloyds Banking Group - would be limited to £10 billion.

Reforms next year should see banks forced to hold much more capital - making them less profitable - as well as greater scrutiny of top-earners and an end to bonuses which encourage recklessness.

Lord Myners added: "We mustn't forget what we are striving for here - soundly managed banks and markets that support and enhance the generation of wealth in our economy.

"This will in turn support lending to businesses, opportunities for home-owners, and security to savers; a banking that is economically and socially useful."