Should investors return to stricken banks?

The reputation of the UK banking sector hit a new low last week after the FSA hit Barclays with its largest ever fine of £59.5m for breaching LIBOR regulations.

Other banks are also implicated, and separately the UK’s lenders were hauled over the coals for mis-selling interest rate swaps. Share prices fell sharply following a speech from Chancellor George Osborne attacking the “systematic greed” of Barclays’ traders, with the bank’s shares tumbling by 18% to 173p on Thursday.  Shares in Lloyds and RBS also dived as it emerged they were under investigation by the FSA. Scrutiny of the sector then intensified on Friday after it was reported Barclays, HSBC, Lloyds and RBS have agreed settlements with the FSA following “serious failings” in their ...