Which? is calling on the government to stand firm on its banking reform commitments as Chancellor George Osborne delivers his Mansion House speech today and the government outlines its Banking Reform White Paper.
Which? has welcomed today’s Banking Reform White Paper. Richard Lloyd, executive director of Which?, said: ‘Plans to ring-fence high street banking from riskier investment banking is a major step towards restoring consumer confidence and transforming the culture of banking.’
He added: ‘Never again should consumers have to foot the bill for a banking bailout that last time cost every man, woman and child £2,000.’
Separate retail from risk
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. Which? believes this would be a major step towards restoring consumer confidence and transforming the culture of banking.
The report also recommended steps be taken to encourage greater competition in the banking sector. Mr Lloyd said the government must ensure it acts on these recommendations to ‘seize this opportunity to increase competition and choice on the high street’. He added: ‘Without decisive action, consumers will continue to pay the price for a lack of competition.’
Portable bank accounts
The ICB also put its support behind the notion of portable bank accounts, which would make it easier for consumers to switch banks.
Mr Lloyd said: ‘Banks need to be incentivised to compete and provide better value products and customer service. The development of portable bank account numbers is one way to make it easier for people to switch bank accounts, and force banks to genuinely compete for customers.’
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).
- Join our banking debates on Which? Conversation
- Find out why we’re asking MPs to ‘adopt’ Milo our watchdog
- Find out how we fed into the Independent Commission on Banking report