Leading Article: Bank rage hits Oxfordshire

Some time in the past 20 years the bank manager ceased to be a stern but well-intentioned family friend and became a salesman. The old, cautious, Captain Mainwaring figure in his wood-panelled office retired. He was replaced by more thrusting types under instructions from head office to shift "new products", otherwise known as loans, pensions and insurance policies.

The change was probably inevitable as different parts of the financial system merged into each other and competition increased. But those who used to look up to bank officials - much as they might a doctor or a priest - have suffered culture shock. Trusted bankers failed to steer their customers clear of financial disaster; indeed, those who read the financial pages will know that many banks themselves have run close to the rocks in the past 15 years. Even so, it is perfectly understandable that some of those saddled with unmanageable loans now exclaim: Captain Mainwaring! thou shouldst be living at this hour.

It is at this point that the unsuspecting customer discovers that the pushy young salesman is backed up by a stiff and unsympathetic bureaucracy. The ensuing torrent of legalistic letters announcing punitive charges is all the more insulting when accompanied in the same post by glossy flyers advertising opportunities for further imprudence. "Bank rage" has resulted; a sense among many people that these financial institutions have abused them and that it is time to strike back.

So few people will feel much pity for Lloyds today. The bank has been ordered to pay more than pounds 77,000 compensation to an Oxfordshire couple, Julia Verity and Richard Spindler, who gambled the bank's money on the housing market but were stung by the property slump.

The court found that in making the loan the bank manager in question went further than he should have done in securing the transaction. No doubt thousands of others will now wish to examine whether a similar argument can be used in their own cases.

It would be wrong, however, to think that we can rely very far upon the courts to guard us against mistaken financial judgements. The primary responsibility of the bank is to ensure that the risks involved in a transaction are fairly described and that the wording of any contract is clear and properly drawn to the attention of customers. Some progress has been made on these matters through the agency of the various regulators in recent months, but there is further to go.

But the wise customer will also understand that a professional banker is not necessarily the best judge of any individual's financial risk. Indeed, the banker is no more to be trusted than someone selling a television or a car.

For some reason this principle is almost always expressed in Latin: caveat emptor. Better to understand it in plain English: buyer beware. You have nothing to lose but your money and your innocence.