King's parting shot at meddling UK banks Sir Mervyn King lambasted top bankers and politicians on Tuesday for trying to interfere with efforts to make UK banks safer, in his final public appearance before he stepped down as Bank of England governor Sir Mervyn complained that bankers left meetings with the new Prudential Regulation Authority about increasing their capital stocks and immediately called the prime minister and chancellor to put "tremendous pressure" on politicians to water down the rules. In at least one case, Sir Mervyn told Parliament's Treasury select committee, calls were then made to the PRA about the banks" concerns. People familiar with the matter said Sir Mervyn was referring to a call from an aide to George Osborne, the chancellor, to Andrew Bailey, the deputy BoE governor and head of the PRA. "It is important that this not be done," Sir Mervyn said. It is no good making speeches in general saying we want an effective supervisor and then, when it comes to an individual bank, asking the supervisor to back down. Downing Street did not deny that banks had been in touch with senior officials in Number 10 and at the Treasury to discuss regulatory questions, indeed contacts are frequent. Sir Jeremy Heywood, the cabinet secretary, has strong City contacts and is a key intermediary. Mr Cameron's spokesman refused to exclude the possibility that regulatory issues - including global capital rules - had been discussed at a high level with regulators. But Downing Street insisted: "The regulatory body is completely independent - it makes independent decisions on capital levels in our banks." Andrew Tyrie, the TSC chairman, urged the Chancellor to "look into this and give us reassurance. Representations of the views of banks are desirable. Attempts to influence the independent regulator are unacceptable. Mr Osborne responded, "Of course, if there is unacceptable pressure, I absolutely say that that is not acceptable - if that is the right way to put it. The PRA, which we created, is completely independent and it has made its independent decisions on capital in our banks. A British Bankers' Association spokesman said, "It is important that there is a dialogue between industry and the government, just as consumer groups and trade unions quite properly speak to government officials on a regular basis." Despite his warning about lobbying, Sir Mervyn said regulators have stuck to their guns on making banks hold more capital against potential losses on commercial real estate and imposing possible additional penalties for misbehaviour. "The PRA board has been absolutely firm," Sir Mervyn said. Some bankers have been openly critical of the regulator's recent decision to force lenders to comply with a higher leverage ratio of 3 per cent of capital as a proportion of total assets, years ahead of the Basel III global requirements. Sir Mervyn also criticised those complaints, saying, "I don't think that banks should conduct conversations with supervisors through the front pages of the Financial Times."