Which? is calling on the government to stand firm on its banking reform commitments amid intense lobbying from the banks.
The request comes ahead of Chancellor George Osborne’s Mansion House speech and the government’s publication of the Banking Reform Bill White Paper.
Which? says the government must prove it is listening to the public by making sure consumers are properly protected from a recurrence of the banking collapse that required a bailout equating to £2,000 for every man, woman and child.
Richard Lloyd, executive director of Which?, said: ‘Without strong action that shakes up the culture of British banking, consumers will continue to pay the price.’
Sir John Vickers banking report
On 12 September 2011, Sir John Vickers delivered the Independent Commission on Banking report explaining how the banking industry should be radically reformed to prevent another financial crisis and remove the taxpayer guarantee against bank failure.
The government approved some of the Commission’s proposals to implement major reforms to the UK’s banking sector – with the biggest change forcing banks to separate out their retail operations and risky investment banking operations.
Consumers must not foot the bill
Mr Lloyd said: ‘Plans to ring-fence risky investment banking from essential consumer retail banking must not be derailed by vested interests. Never again should consumers have to foot the bill for a banking bailout that even the banks admit will not be repaid in our lifetime.’
He added: ‘The government must also make sure that the competition recommendations of the Vickers Report are fully enacted to increase competition and choice on the high street.’
Lack of confidence in reform
In a Which? online survey, 71% of people told us they are not confident the government will act in the consumer’s best interest when implementing banking reforms. 76% of people say the government has not done enough to ensure there is no repeat of the financial crisis.
Six in ten people do not think that banks have learnt their lesson from the banking crisis and seven in ten would like to see a division between retail and investment banks.
Watchdog not Lapdog campaign
Financial stability is a key consumer issue and we feel it is important the Chancellor has ordinary people in mind when taking these reforms forward.
Which? launched the Watchdog not Lapdog campaign at the start of 2012 calling for a strong, open and proactive financial regulator in preparation for the new financial watchdog coming into action in the form of the Financial Conduct Authority (FCA).
- Find out why we’re asking MPs to ‘adopt’ Milo our watchdog
- Join our banking debates on Which? Conversation
- Find out how we fed into the Independent Commission on Banking report