Brown group slams politicians and banks

The head of a group set up by Gordon Brown to look at financial regulation, today launched a stinging attack on politicians and bankers alike for their failure to change regulations a year after the collapse of Lehman Brothers.

Barbara Ridpath, chief executive of London's International Centre for Financial Regulation which is funded by the Treasury, investment banks and other financial services firms, said: "Except for those who have lost their jobs in financial services, their businesses through lack of credit or their homes through predatory lending practices, there is little sense that any lessons have been learned or that anything fundamental within the culture of financial services needs to be changed."

Ridpath accused politicians of stepping back from reforming regulation now that the worst of the banking crisis is over. And she accused bankers of returning to "business as usual" with big bonus payments and hefty pay packages for start teams.

If nothing is done, she said: "There is a good chance we are already sowing the seeds of the next financial crisis.

"There is risk that we arrive at a stand-off, where politicians respond to bankers' recalcitrance by becoming more shrill in their demands, and bankers more threatening in their responses."