29th June 2011
Marcus Agius, chairman of Barclays and the BBA, apologised for the banks' mis-selling of PPI saying: "PPI was a product where we got things wrong. We have apologised and want to put things right."
Barclays has said that it will reimburse people who were mis-sold PPI by paying them back their premiums with interest. PPI is insurance which is meant to cover individuals if they are unable to pay loans and credit card debt if they become ill or become unemployed.
But hundreds of thousands of policies were sold to people who could never a make a claim because they were self employed or had pre-existing illnesses which meant they were ineligible to claim. As for cleaning up banking Mr Agius said they were addressing the need to strengthen capital ratios, improving remuneration packages (to include more deferred remuneration in the form of shares) and trying to better understand and manage the risks of lending.
Mr Agius' also claimed that banks are keen to lend more to SMEs, despite claims they are not.
Mr Agius also said banks should devote more time to Social Impact Bonds which are a way of financing charities which engage in commercial enterprises, such as being paid for the successful rehabilitation of prisoners.