Banks must be forced to serve customers, not just make massive profits from them
Tens of million bank customers appear to know something that Chancellor George Osborne doesn’t. It’s that we have no confidence left in our banking system and there urgently needs to be change before we can start trusting Britain’s bankers again.
MPs are the latest to tell the Chancellor that his attempts to reform banks are woeful, ahead of a debate on the banking reform bill in Parliament today. In a damning report published this morning, the Parliamentary Commission on Banking Standards calls Osborne’s plan “wholly inadequate” and that “the Government’s arguments are insubstantial”.
The Commission repeated its call for watchdogs be handed reserve powers to break up the entire British banking industry. That may sound unnecessarily drastic, but let’s bear in mind that banks’ action came close to bringing about the collapse of the whole economy.
Osborne has been talking big about his proposed actions. He has said he will introduce powers to “electrify the ring-fence” if lenders fail to keep high street branch operations separate from the dealing floor.
“2013 is the year when we reset our banking system. So the banks work for their customers and not the other way round,” Osborne said in a speech outlining the banking reform bill last month.
The Chancellor believes handing regulators powers to split the entire industry is unnecessary.
But Andrew Tyrie, chairman of the Parliamentary Commission on Banking Standards said Osborne must go further and introduce a “second reserve power for full, industry-wide separation” if the ring-fence is breached. In other words, a sensible protective measure.
Beyond the political squabbling is a decision that will affect all of us. Banks must be made to put their customers’ needs first, rather than seeing them simply as clients to flog expensive insurance to.
With that in mind, it’s interesting to examine research published today by ethical bank Triodos.
It shows that 16.5m people feel only negative or indifferent feelings towards their bank, with many feeling angry or ashamed about their bank.
When asked to describe their bank, 16 per cent of banking customers used the word ‘greedy’, while a further 6 per cent used ‘unethical’.
When it comes to regaining trust, banks need to offer fairer charges and decent products and be totally transparent about fees and the way they profit from us all. Perhaps the most damning statistic in the Triodos research is that fact that just 7 per cent of banking customers think their bank is transparent.
That shows just how far banks need to go to start restoring trust. And it should send a message to Osborne that his banking reforms are still falling far short of being adequate.Tagged in: banks, current accounts, ethical, osborne, tyrie
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