Bradford & Bingley, Citigroup and UBS were accused yesterday of failing B&B shareholders and of damaging the reputation of the City of London because of the former building society's botched capital-raising.

Senior City figures and institutional investors lined up to denounce the decision by B&B to allow Citigroup and UBS to walk away from their promise to guarantee a critical £300million rights issue on Monday.

Terry Smith, the chairman of Collins Stewart, said: 'This can't have done the reputation of the City of London any good.' Underwriting standards had been falling for years, he said, adding that this failure would make it more difficult for other banks planning rights issues, including HBOS, which wants to raise £4bn.

He contrasted the embarrassing B&B saga with a bond issue by IBM in December 1941 that was underwritten by Goldman Sachs, which stood by the client even when the Japanese bombed Pearl Harbor. 'That's when men were men,' he said.

The Times