Mervyn King reiterates call to break up banks The Governor attacked a culture of "cynicism" and "greed" and said regulators had to make sure that the "casino-banking" mentality does not infect the retail side of banks. He said: "The main thing is to ensure that if the trading mentality leads to practices that we regard as rather unacceptable that it does not impinge on the part of the banking system about which we really care ... It is very important to recognise that as a society we really do want to underpin retail deposits, lending to households and SMEs. But we do not want to underpin people's decisions to take risky portfolio investments, therefore the two should not be on the same balance sheet. He said the culture in the banking industry and the structure of the banking industry with its "excessive levels of compensation" had led to "shoddy treatment of customers." Sir Mervyn said that while a change of culture would take strong leadership and time, making the Vickers recommendations law as soon as possible would "change to the structure of banking to provide the right incentives." Excessive remuneration as banks, which benefited from goverment bailouts during the 2008 financial crisis, has led to deep anger in the country as taxpayers have suffered from harsh austerity measure needed to pay for what are seems as bankers' greed. The BoE's Financial Policy Committee, which published the Stability Report, was set up to spot broad risks such as asset bubbles that could destabilise the financial system to plug a pre-financial crisis supervisory gap. It advised the Financial Services Authority to tell banks that they can tap into large amounts of cash held on their balance sheets if needed in the face of a worsening eurozone crisis. The Bank hopes the move will offer a substantial amount of cash to banks, estimating total liquidity held across Britain's banking system at around £500bn. "Banks have built up significant assets in recent years," Sir Meryn said. They are in a strong position to withstand a period of market stress. But it's very important that they are willing to use them in times of stress to support lending to the real economy. It is the next plank in the Bank's strategy to help Britain's economy recover from its double-dip recession, following the announcement earlier this month of a £100 billion-plus scheme to boost bank lending. The Bank is working on a new "funding for lending" scheme, while last week it held its first £5bn monthly auction under a six-month loan facility programme.