29/06/2012 BBC News at Ten

Another day, another scandal, as British banking is rocked by yet

more controversy. Four of the UK's big banks are found to have mis-

sold complex financial products to thousands of small businesses.

is unbearable. I feel like I have lost my dignity. We have had to beg

and borrow to keep up with the payments. It is like a rope around

my neck. The head of the Bank of England

accuses the banks of shoddy treatment of customers and of

deceit. Everyone understands that something went very wrong with the

UK banking industry and we need to put it right.

And after the chaos for customers last week caused by a computer

glitch, the head of RBS turns down his bonus.

Also tonight: Germany gives way at the EU summit

to help Europe's troubled economies, but is it enough?

After yesterday's torrential rain and flooding, the clean up begins

in parts of England and Scotland. An apocalyptic vision, as wildfires

in the US state of Colorado force tens of thousands to flee their

homes. Roger Federer scrapes through,

after coming close to his worst And coming up in Sportsday on the

BBC News Channel, another late night thrill on Centre Court at

Wimbledon. Roger Federer is taken all the way by France's Julien

Good evening. The governor of the Bank of England,

Sir Mervyn King, has launched an outspoken attack on British banks

for "excessive compensation, shoddy treatment of customers and

deceitful manipulation of interest rates". His comments came after yet

another banking scandal emerged today, the mis-selling of complex

financial products to small businesses, which left some facing

big losses. Today, another bank boss, Stephen Hester of RBS, said

he was turning down his bonus, following the recent problems with

the bank's computer systems. Robert Peston reports.

For Britain's banks, there has been a week like it since they almost

went bust in October 2008. First, Royal Bank of Scotland was unable

to update the accounts of 17.5 million customers. Then Barclays

admitted to try to read interest rates, and today all four big banks

have been found guilty of serious failings in the way they sold

complicated products to small businesses. Something went very

wrong with the UK banking industry and we need to put it right. From

excessive levels of compensation, to shoddy treatment of customers,

to the deceit for manipulation of one of the most important interest

rates, and now this morning to news of yet another mis-selling scandal.

One of the Small Business victims of this mis-selling scandal is this

woman. Berkeley's MACRO sold her of butchers a complicated product

designed to limit on the ability to interest rate movements. --

Barclays. But it has landed her with �76,000 of charges over a year.

It is awful. It is literally killing us, to the point that it is

unbearable. I feel like I have lost my dignity. We have had to beg and

borrow to keep up with payments. It is like a rope around my neck, and

I just feel I am going to get strangled at any moment. She and

other small businesses may be able to cancel the deals and get some

money back, following a settlement arranged by the City watchdog.

of the products were the right products at the right time. Some of

the products were the wrong products for the wrong customers.

We want the banks to differentiate between those two, stop selling

complicated products to people who cannot possibly understand them.

Labour's leader things that we need another big banking inquiry, this

time into the allegedly defective culture of the banks. We have to

make sure we shine the light in all the corners of the banking industry

to understand why are these practices have been going on and

what it is about the culture that has enabled that to happen.

Government is not saying definitely No. We know what needs to be done,

let's get on and take those actions. I have enumerated a number of them

in terms of accountability, regulation, taxation, transparency,

behaviour, punishment for things that are done wrong. On every one

of those, action is required. for the bankers, they are queuing

up to turn down bonuses that have not yet been awarded, to show that

they are sorry. It is inappropriate for me to have a bonus this year.

We have let our customers Downham. That may have arisen from old

systems and things that were before my time but we could reasonably be

expected to improve things. expect our banks to do four simple

things. Keep our money saved, learn what the economy needs, process

transactions and stay honest. Over the past few years and days, they

have failed in all fundamental respects, many would argue. Time to

get back to basics? It is an argument I increasingly here.

Our political correspondent Norman Smith is at Downing Street. There's

lot of talk among MPs about punishing banks and holding them to

account, but what can the Government actually do? Well, the

Government would say that they have already taken steps, but the

difficulty in changing the culture in something as vast and diverse as

the City is that it is inevitably a protracted and slow process. So the

Government have already put in place measures to split up banks

into their retail and investment arms, ring-fencing of the risk-

taking element, but that is not due to come into force until after the

next general election. They have looked to curb cash bonuses, but

many bankers still seem to receive huge financial rewards. And the

Government is looking at legislation to ensure traders who

fiddle interest rates will go to jail. The difficulty is that that

is an incremental process, at a time when the public is breathing

down the neck of ministers demanding, in effect, that heads

roll now. And that sentiment is gaining political expression

through growing calls for a Leveson-style inquiry into the

banks. Interestingly, the Prime Minister is sceptical about such a

move but he has not ruled it out. Why? Because he is acutely aware of

the level of public anger towards the banks, and he knows that in

order to assuage it, he may yet, down the line, have to concede such

an inquiry. European leaders have insisted

they've achieved a "real breakthrough" at the latest summit

to tackle the eurozone debt crisis. The latest plans would allow bail

out funds to lend directly to troubled banks, something Germany

had previously resisted. While Chancellor Merkel is facing

criticism at home for performing a U-turn, the markets have, so far,

welcomed the move. From Brussels, Gavin Hewitt reports.

During 15 hours of negotiations, it was the German Chancellor, Angela

Merkel, who blinked first. Under enormous pressure, she made

concessions, putting more of her taxpayers' money on the line to

support the euro. It was Italy and Spain who lined up against her, two

countries struggling with huge borrowing costs. The Italian Prime

Minister, Mario Monti, said he would not leave the summit without

a deal, he would block of the discussions. Finally, Angela Merkel

agreed to be more flexible over bail outs and to accept direct hope

for the banks. -- accept direct help. Italy has put a lot of

pressure at the negotiating table for this to be achieved. What was

in the deal? The bail out fund will be able to help the banks directly,

rather than going via government and increasing their debt. But only

after a powerful banking supervisor is in place. And extra flexibility

for the bail out funds to buy government bonds and so force down

borrowing costs. The Spanish had big smiles, and the Italian Prime

Minister claimed double satisfaction, his country having

beaten Germany at the football. In future, Italy would be able to

access bail out funds without tough austerity conditions. Back home,

some said Chancellor Merkel had suffered a painful defeat. She said

she had been able to make concessions because she had won

tighter controls over the banks. TRANSLATION: When you have a

meeting late into the night, there is a certain risk. We are under

pressure from the financial markets and people find themselves in a

very complicated situation. So we had a shared interest to find a

solution. In Germany, there were demands for Chancellor Merkel to

explain what was described as a 180 degree U-turn. Germany alone cannot

pay for all the countries. We are not so strong. In some years, we

all will regret what happens now. And then it will be too late.

was another clear message out of this summit. In order to save the

single currency, the euro is moving towards much closer integration.

Economic union, banking union, political union. The UK will not be

part of those changes, but they pose real challengers. That change

has consequences for Britain. My job is to make sure that we secure

all the safeguards that we need, so that our role in the European Union,

hour access to the single market, our say in the single market is

properly safeguarded. Summits have come and gone. This was the 19th.

But power in Europe has shifted. The Germans are more isolated.

Italy and Spain have found an ally in France. Time has been bought,

but a comprehensive solution to the debt crisis is a long way off.

I am joined by Stephanie Flanders. Germany has compromised the little

bit. Politicians are claiming a breakthrough. Is it? You know I am

not going to say it is a solution to all of the eurozone's problems.

It is not that kind of crisis, and it was not that kind of summit. One

of the reasons that the markets reacted favourably to this today is

that the brief statement released late last night has a hint of

progress in two important areas which do matter to financial

investors and will make it easier for governments to feel they are

responding to this crisis in the short term. One is the admission

that you can give money to a troubled eurozone bank without that

money adding to the debt of the government of that country. That is

going to be very important, but as Gavin suggested, it will only

happen when you have moved to a European banking union with a

single bank supervisor. Important in principle, but it could take a

long time to achieve and in the meantime we do not know what will

happen to countries like Spain and their banks. The other point, the

issue that the rescue funds might find it easier to invest, to move

into the financial markets and hope financial markets, countries

directly with their borrowing costs. -- help them. That would be great

for investors if they thought it was going to happen, but there is

no sign that there will be any more financial backing for the rescue

funds to make that intervention really effective, from the European

Central Bank, for example. So there are still a lot of details to iron

out. But certainly the hint, and the exception of a principle that

things really could be quite different in future.

It's the second wettest June in the UK since records began and we

haven't got to the end of the month yet. If it carries on raining it

could break the record. That will come as no surprise to homeowners

and businesses who've spent the day clearing up and counting the cost

after the storms which battered parts of England and Scotland last

night. And there's been more disruption on the railways today

after flash floods left thousands of passengers on the East Coast

Main Line stranded. Danny Savage So much rain fell here in North

Tyneside that the water just ran through people's homes. It turned

residential streets into torrents. You did not need the car, you

needed a boat. Some make the most of conditions. How about a canoeing

course in the back garden? What a difference 24 hours can make it!

The water has gone. Most people living here except the damage was

caused by freak weather conditions. They have the long and drawn-out

task of trying out their homes and dealing with insurers. Nobody had

time to get things to safety but everybody had something to say

about the storm. It was the end of the world. It was Armageddon. I had

never seen the sky quite so black. I was driving and you could not see.

Dozens of schools were closed as many classrooms ended under water.

On the rail network, thousands of people had their travel plans all

journeys disrupted, to the dismay of some here in Edinburgh. Absolute

chaos! Engineers have got those routes linking Scotland and England

open again today but not before some passengers had to endure

marathon journeys. 15 and a quarter hours to travel from London on a

train. Fire, at Rail and landslides. I have been seven hours on the

train. All these problems were caused by short-lived but violent

storms. Where there experts say the conditions yesterday were some of

the most severe and Mashable in the UK. More than 100,000 lightning

strikes were detected. -- imaginable. It was the wettest

April to June period on record, according to the Environment Agency.

A prisoner, who scaled the walls of Pentonville Jail and escaped on

Wednesday, has been arrested by police. John Massey, a convicted

murderer, was found at an address in Faversham, Kent. A second man

was arrested on suspicion of helping him escape. There has been

more heavy fighting and reports of a fresh massacre in Syria tonight,

on the eve of a major United Nations conference in Geneva.

Opposition activists claim dozens of civilians have been killed in a

suburb of Damascus. Tonight, the US Secretary of State, Hillary Clinton,

is meeting her counterpart in Moscow to try to agree a diplomatic

response. Our correspondent, who has reported extensively on the

conflict, has the latest. Artillery pounds a suburb of Syria's capital.

This is 20 minutes' drive from the presidential palace, yet in rebel

hands. The regime is trying to seize it back. After the shelling,

say activists, militia men arrived to kill people one at a time. In

this house, the bodies of men, women and children are piled up -

three generations. In a rare interview, President Asad gave his

backing to the United Nations peace plan. There was no mention of the

UN ceasefire that goes with it. The responsibility of the Syrian

government is to protect all our residents, he said the start that

means the responsibility to annihilate terrorists. -- he said.

The United States says Mr Assad must go. Hillary Clinton needs the

agreement of Russia. That can be difficult. Despite what the Russian

Foreign Minister says, so far Moscow is continuing to give

President Assad its diplomatic and ministerial support. If so, that is

bad news for the UN peace plan and its author, Kofi Annan. He is

meeting the permanent members of the Security Council in Geneva

tomorrow. It is starting to look like a last-ditch effort to save

the plan. There is no Plan B, no alternative to the UN process.

Members of the Security Council tried to resuscitated here tomorrow.

The violence in Syria has escalated throughout a series of

international initiatives. President Assad has made it clear

he is prepared for a fight to the finish and is expecting a long war.

Coming up on tonight's programme: The woman who would be president of

Iceland, with her baby, on the campaign trail. Icelandic women

have always worked a lot, no matter how many children they have had.

Tens of thousands of people in the American state of Colorado have

been forced to flee their homes as wildfires sweep across the area.

More than 1,000 firefighters have been deployed to fight the blaze,

which is now threatening the state's second largest city,

Colorado Springs. From thousands of miles above the Earth, smoke pours

into the sky. Colorado it is burning. The flames have flicked

ever closer to the second city, Colorado Springs. 30,000 people

have been evacuated. Searing temperatures and whipping winds

have provided the perfect conditions for the blaze. I were

standing outside my apartment. You could see the fire down the hill.

Already, homes have been turned into little more than piles of cash.

Some residents were given just minutes to abandon their homes and

nearly all their possessions. love my home, I love the area we

live in. To think that all of that is gone is so heart-wrenching.

After declaring a major disaster and releasing federal aid to the

state, President Obama flew to Colorado. He saw how fire had

consumed some houses, left others untouched. The President was struck

by the reach of the fire. devastation is enormous. Our

thoughts and prayers go out to all the families who have been affected.

When natural disasters like this happen, America comes together. We

all recognise that there for the grace -- but for the grace of God

go I. After six days of distraction, firefighters say they are getting

to grips with more and more of the blaze. For the first time, there is

a cautious note of optimism. It depends which way the weather turns.

She is a journalist and former game show host who gave birth just a

month ago but, tomorrow, Thora Arnosdottir will find out whether

she's been elected President of Iceland. The country has seen women

rise to some of the most senior positions in the wake of the

economic collapse, as voters turn against male politicians. Our

correspondent joined Thora Arnosdottir - and baby - on the

campaign trail. While some mothers with a month old baby struggled to

get out of the house first thing, she is dressed and ready to

campaign by 8:30am. Her husband is in charge of the baby today. That

means she can refine her message to potential voters. It means spending

hours in a Mini van driving through the Icelandic countryside. It is

far from glamorous. She talks to the work force in a fish factory

and managers to grab some breakfast. Then and our old people's home. A

small group but in a country where the population is 320,000, any size

audience is welcome. She feeds her baby girl in the van but she does

get one proper stock. We have both been working full-time. We managed

to be really good parents at the same time. That will not change.

Icelandic women have always worked a lot, no matter how many children

they have had. That does not change. No matter what the job is called.

Iceland is progressive when it comes to women in top positions.

Followed -- following the Icelandic banking crash, many of the male

politicians who fail to see it coming were voted out and replaced

by women. The speaker of parliament is a woman. As is the Minister of

Finance and the first female bishop has just been ordained. The person

she is challenging his one of the only surviving men in a key role.

There is a long list of high offices in Iceland in the last 25

years that have been held by women. That is as it should be. They

believe the President has become too political during his years in

office. She wants to return the role to that of a figurehead above

politics. If she wins, her husband will become a house-husband. I do

not see myself as a lesser man. I can care for the baby and watch

football. 12 hours on and she is still on the campaign trail. It is

easy to forget that here in the land of the midnight sun, How Late

It is. Getting out of the capital and into the sticks, is what she

needs to do to win votes. It is difficult for anyone, let alone

with a baby in tow. The Hollywood couple Tom Cruise and Katie Holmes

are to file for divorce after five years of marriage. The pair married

during a lavish ceremony in 2006. The split was announced by Katie

Holmes' lawyer, who said it was a private matter for the family. It

looked for a moment this evening like Roger Federer was going to go

the way of Rafa Nadal as he came within two points of his worst ever

defeat at Wimbledon. But he just managed to pull through to win in

five sets. Meanwhile, yesterday's unexpected victor, Lukas Rosol, has

found himself the new darling of the All England Club. Our sports

correspondent reports. Sport tends to work best when it is

unpredictable. In the match with Roger Federer, it came when his

poise and serve was broken in the first set. Then the six-time

champion lost the second to a not very famous Frenchman. Roger

Federer donned his crime pons and began to inch back. He took the

next two sets. With his opponent in pain from a leg injury, Roger

Federer struck. It was a tough match! It was brutal. A bit of luck

may be on my side. Earlier on centre court it had all been easier

for of Agnieska Radwanska. She played Heather Watson. The match

was over in under an hour. Last night, Rafael Nadal, the number two

seat lost. Most of his fans would not have known who his opponent was

before the match. He is the world No. 100. I did not realise what was

happening. I was playing amazing yesterday. I have never seen

someone look less intimidated by it Rafael Nadal. It is a little dream

for me. That match last night was as big an upset as I have seen. It