Tweet
http://www.timesonline.co.uk/tol/mon...cle5292450.ece
Patience with the banks has finally run out. The cosy system of self-regulation that governs the way that banks treat customers is to be wiped away, it emerged this week. From next year the Financial Services Authority (FSA), the chief City watchdog, will take over the policing of retail banking.
Few would disagree that savers need stronger protection when battling the banking industry. The existing banking code has acted as window dressing while poor service and bad practice remain rampant. The huge number of complaints to our Troubleshooter column is proof of that. Banks entice savers into accounts that are not in their best interests, mislead customers about fees and ignore legitimate complaints in the hope that they will go away.
Tighter regulation is long overdue. I fear, though, that policing by the FSA will not make the slightest difference to the banks' bad behaviour.
During the credit crunch, the City regulator has often seemed slow, timid and out of touch. Too often it has been caught on the back foot, mopping up after milk has been spilt rather than preventing it happening in the first place, Northern Rock being the classic case. The FSA appears to be fighting a losing battle to stay on top of a burgeoning workload. With so much to worry about, protecting banking customers is not going to be top of its agenda. When it does take a stance, its bark often seems worse than its bite. It can fine banks that fail to play by the rules, but to what effect? The FSA has dished out more than £9 million in fines to try to stamp out mis-selling of payment protection insurance, but it continues all the same.
The FSA's commitment to customer rights is also suspect as it attempts to juggle the needs of industry and the consumer. It does not augur well that Lord Lipsey walked out as head of the Financial Services Consumer Panel last week after the FSA denied him a louder voice to stand up for consumer rights.
If you are not convinced yet that this will do little to benefit savers, consider this: the British Bankers' Association, the industry's trade body and chief apologist, has pledged its support. I rest my case.
Patience with the banks has finally run out. The cosy system of self-regulation that governs the way that banks treat customers is to be wiped away, it emerged this week. From next year the Financial Services Authority (FSA), the chief City watchdog, will take over the policing of retail banking.
Few would disagree that savers need stronger protection when battling the banking industry. The existing banking code has acted as window dressing while poor service and bad practice remain rampant. The huge number of complaints to our Troubleshooter column is proof of that. Banks entice savers into accounts that are not in their best interests, mislead customers about fees and ignore legitimate complaints in the hope that they will go away.
Tighter regulation is long overdue. I fear, though, that policing by the FSA will not make the slightest difference to the banks' bad behaviour.
During the credit crunch, the City regulator has often seemed slow, timid and out of touch. Too often it has been caught on the back foot, mopping up after milk has been spilt rather than preventing it happening in the first place, Northern Rock being the classic case. The FSA appears to be fighting a losing battle to stay on top of a burgeoning workload. With so much to worry about, protecting banking customers is not going to be top of its agenda. When it does take a stance, its bark often seems worse than its bite. It can fine banks that fail to play by the rules, but to what effect? The FSA has dished out more than £9 million in fines to try to stamp out mis-selling of payment protection insurance, but it continues all the same.
The FSA's commitment to customer rights is also suspect as it attempts to juggle the needs of industry and the consumer. It does not augur well that Lord Lipsey walked out as head of the Financial Services Consumer Panel last week after the FSA denied him a louder voice to stand up for consumer rights.
If you are not convinced yet that this will do little to benefit savers, consider this: the British Bankers' Association, the industry's trade body and chief apologist, has pledged its support. I rest my case.
Comment