New research from Which? reveals that consumers back plans to separate banks’ retail operations from their investment arms.
According to a public survey of 1,299 UK consumers, the majority don’t think that the banks (76%) or the government (71%) have done enough to ensure there is no repeat of the financial crisis.
And with just 14% of people saying that the banks have learnt their lesson from the credit crunch, seven in 10 consumers (71%) back proposals to separate retail from investment banks, which would safeguard the deposits of customers and essential retail banking services if one of the UK’s big banks was to go bust.
Ring-fencing expected to be a key ICB recommendation
Ring-fencing, one of the key recommendations expected from the Independent Commission on Banking (ICB) in its final report on Monday, has been under concerted attack from some in the banking industry.
Seven in 10 people (71%) are not confident that the Government will act in taxpayers’ interests when it considers reforms to the banking industry. Which? is calling on ministers to quickly set out a timetable for implementing the ICB’s recommendations.
As well as measures to prevent another financial crisis, the ICB will also publish recommendations to improve competition in retail banking.
Which? calls on the government to act in the interest of consumers
Which? chief executive, Peter Vicary–Smith, says: ‘Consumers want to see a firewall between retail and investment banks so if there’s a repeat of the financial crisis the banking services they rely on day-to-day will be protected.
‘The government has a simple choice to make on banking reform – act in the interest of taxpayers, consumers and the wider economy, or act in the interest of the banks.
‘By immediately putting in place a timetable for meaningful and speedy reforms, ministers can reassure the public that the banks haven’t been let off the hook.’