Bank reforms must press ahead, says Which?

George Osborne Mr Osborne is due to deliver his Mansion House speech on 14 June

Chancellor George Osborne should resist pressure from banks to reverse planned reforms of the financial sector, consumer group Which? has said.

Mr Osborne is creating a new watchdog that Which? says should protect consumers from "rip-off" charges.

The Financial Services Bill will mean the replacement of the Financial Services Authority by two new bodies.

The British Bankers' Association denied lobbying Mr Osborne and said banks appreciated the need for the bill.

The Financial Services Bill is due before the House of Lords and a banking reform White Paper is due out.

Banks have claimed that the reforms may prompt big financial institutions to leave the UK.

Which? says the government must ensure consumers are sufficiently protected from a recurrence of the banking collapse that led to a costly public bailout.

Executive director Richard Lloyd said: "We have seen intense lobbying from the banks... including a crescendo of scaremongering over recent weeks on the risk of the end of 'free banking' and of big financial institutions leaving the country.

"The chancellor must resist buckling under this pressure."

'Ordinary people'

He said without "strong action" to shake up the banking culture, consumers would continue to pay the price.

The group urged the government to keep "ordinary people" in mind when pushing through its reforms.

The Financial Services Bill will replace the structure - introduced by the previous Labour government - under which oversight is shared between the Bank of England, the Financial Services Authority (FSA) and the Treasury.

Instead, a new Financial Conduct Authority will be established to enforce the effective and fair functioning of markets.

The Financial Policy Committee will be established to look after the general well-being of the UK financial system.

And a new Prudential Regulation Authority will monitor the performance of banks and other companies that manage significant risks on their balance sheets.

The bill will also give the chancellor powers to veto decisions made by the Bank of England when dealing with bank bailouts.

Financial institutions have campaigned against plans to put savers first if a bank becomes insolvent.

'Absolutely right'

The government is also due to publish a White Paper on banking reform, introducing measures to prevent another banking collapse.

Angela Knight, the British Bankers' Association's chief, told the BBC that the banking sector was working with the government to make reforms, not block them.

"We entirely agree that there needs to be changes and we're working very strongly with government on these changes.

"Do customers need protection? Do they need to be put first? That is absolutely right as well.

"There are debates that need to be taken but actually they've got to be taken properly."

Mr Osborne is due to deliver his Mansion House speech on the economy on 14 June.


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  • rate this

    Comment number 587.

    The bottom line here, for me at least, is that government and banking are demonstrably in cahoots & have been for years, whilst hiding the fact & pretending otherwise. Successfully too, though much less so of late.
    Based on that, govt suggestions of solution, be it by regulation or if they said they'll do it by voodoo, carry the same weight with me.
    They are the problem, ergo not the solution.

  • rate this

    Comment number 586.

    @585 Crime is crime, the sheeple just want something to lay the blame on for their own shortcomings. MP's expenses, Phone hacking, 'greedy' bankers and there will be more categories added to the media witch hunt as soon as the news channels identify them.

    How many of the people saying sack the MPs bumped their own mileage or sneaked through drinks on the hotel room on business trips?

  • rate this

    Comment number 585.

    584 - "hanging taxi drivers", hardly the same thing as holding a criminal investigation for fraud is it?!

  • rate this

    Comment number 584.


    tenor? tenure? tone? It doesn't make sense, I can sing but I've never had my posts described as tenor. I don't mean to imply any kind of superiority I am just a bit dry in my humour and blunt with my words.

    @583 Where do we draw the line? What about hanging taxi drivers who sneak an extra quid on the charge? Council workers who pinch a biro. The world is corrupt, deal with it!

  • rate this

    Comment number 583.

    Comfortably Numb - if you are not consciously trying to quell the malcontents then I apologise for upsetting you but austerity is an emotive issue.
    British bankers should be under criminal investigation for the lives they have/are ruining as they are in the US.

  • rate this

    Comment number 582.

    581.Boro Jonesy
    WUM=wind up merchant. & yes I meant 'you're' obviously. Typos happen.
    Yes I mentioned gold. I did not ask for an explanation as to what it was.
    In fact the whole tenor of your posts is offensive in its implied superiority and therefore, until you learn to communicate with us lesser beings in a civilised manner, post #581 will be the last communication I respond to from you.

  • rate this

    Comment number 581.


    What is a WUM? And did you mean you're not your? You brought up Gold in 572, I argued Gold has no real value in 575, that was the relevance. You can't run your car on it, heat your home with it efficiently, nor can you eat it. In fact it only has value when times are good and people want to show off.

    I have a very nice life thank you, expensive due to my tastes, but nice :)

  • rate this

    Comment number 580.

    577.Boro Jonesy
    I'd actually written a serious & genuine query about the relevance of your post #575 directed at my #572, 'coz I couldn't see any.
    How glad I am to scrap that reading #577 & realising your just a WUM.
    Not even a good one. I'm being kind there, in fact.
    I should try to pick up a life somewhere if I were you, before they all get too expensive

  • rate this

    Comment number 579.

    However that is the effect and consequence of your attitude. Writing off debt is stealing other people's money, mostly older people's life savings and pensions.

  • rate this

    Comment number 578.

    "Let me issue and control a nation's money, and I care not who makes its laws" Rothschild, 1790 .

    "If you don't let us carry on, we'll take our companies overseas" Any old banker, 2008 (and still banging the same drum four year and several billion quid later).

    Looks like Gideon is going to let his mates have their way, I'd guess.

  • rate this

    Comment number 577.


    No, the actual problem is Porsches for Plumbers and Cruises for Cleaners. People with rubbish salaries and skills via equity release and cheap credit now have an expectation for a quality of life which was never within their grasp anyway.

    We can't all be pop stars and footballers, deal with it dole people.

  • rate this

    Comment number 576.

    570.David Holder
    I take your point my friend, and apologise, but given the bashing my profession has regularly received of late I'm maybe a little touchy on the topic.
    The bashing is all based on lies but is too readily lapped up.
    Private or public, we're all being shafted to feed bankers need for a new Porsche every year. We shouldn't let them divide us.
    We all know it stinks.

  • rate this

    Comment number 575.

    Gold is a historic measure of wealth due to its scarcity. it is largely an aesthetic and traditional commodity and has no real value.Energy is another matter, it's foolish to think that oil will always rule. Even if it does for a while, we could stop exporting it!

    @573: Money supply has to grow with population or else there's less dosh amongst more people. Fractional banking creates new dosh

  • rate this

    Comment number 574.

    568. Fin. Yes there is a big problem with housing. The lack of building and the price of what there is. The price problem comes from the abandonment of the old formula where you could only borrow 3.5 times you salary.

  • rate this

    Comment number 573.

    @554. David Holder
    Thats where there has to be a change with how the banks operate. Only being able to lend what they physically have. The BoE would need to become truely independant of goverment. BoE would control the hard carsh flow. What it giveth it can taketh, destroying some physical money which in turn reduces the ammount of free cash and in turn iflation. Money needs to become physical,

  • rate this

    Comment number 572.

    563.Boro Jonesy
    You may be right, but with China hoovering up gold voraciously and with at least 3 of the BRICs attempting oil deals in currency other than the dollar (with very strong evidence indicating it to be the true reason for the invasion of Iraq) I'm not so certain of the global might of the US, by comparison to now, should the petrodollar be succesfully shunned, looking futureward.

  • rate this

    Comment number 571.


    ....and the bone idle millions who won't work are hoovering up all the taxes the bankers pay and then some. The young are unemployable because they all have cornflake packet degrees that are now worthless. The poor must suffer cuts just as the workers do. Elderly people probably own their homes and can release equity.

    Balanced your argument

  • rate this

    Comment number 570.

    566. insert_name_here. A below inflation pay rise (circa 1% - 15%) is still better that no pay rise (circa 0%) or even worse a pay cut (circa -2%) or redundancy (circa -100%), which is what many in the Private sector have had for the last decade. Just pointing the effect of the difference between 2 years of no pay rise to 10 years of no pay rise (or worse).

  • rate this

    Comment number 569.

    Should banking reform go ahead? Look, it comes to this. "The nation" bailed out the banks after the collapse of 2008. Elderly people are paying for that in a tightening of their pensions. The poor are paying for that in cuts to benefits. The young are paying for that in a thousand unanswered job applications. The heads of banks are still paid seven figure salaries. Go figure

  • rate this

    Comment number 568.

    Lets face it, the real problem is housing.

    The cost of a new property is so high everyone is reliant on a mortgage i.e. credit and as such everyone has to get credit for everything else.

    Deal with housing, invest in companies who make homes create new jobs, spread the wealth and everyone will be a lot less reliant on credit.


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