Vince Cable: investors' expections of bank returns are 'unrealistic' In a speech to the Association of British Insurers annual conference, the Business Secretary rebuffed concerns that British banks are "uninvestable" and claimed that shareholders have had a "hopelessly unrealistic" expectation of returns from lenders. "There has been an assumption of returns that is hopelessly unrealistic in what are essentially utilities," he said. There needs to be a realistic appraisal of what banks are and what they do. Mr Cable blamed "bank bosses like Bob Diamond," the former chief executive of Barclays, for promising investment returns of "15pc or more" and raising expectations. Speaking after the conference, Mr Cable agreed "there may well be a conflict [between] what investors have expected" and the Government's aims. But he insisted the regulatory changes were designed to "make banks safer" and as a result the old high risk, high return models had been scrapped and "rightly so." Last week the ABI, whose members control £1.5 trillion of assets and are among Britain biggest investors, published a report cautioning that regulatory demands on banks were crushing lenders" return on equity and the case for investors to buy their shares. The alert, first reported by The Sunday Telegraph, was designed to serve as a warning to politicians and regulators who want major banks to raise billions of pounds of capital to shore up their balance sheets. The report said "a truly 'safe" system is unrealistic." At the ABI conference, Mr Cable insisted the regulatory landscape was "becoming a little bit clearer." He argued the investment case for banks is strong because "banks are less risky and safer"; regulations, including ring-fencing, is now clear; and competition among banks improving.