BBA response to Which? Future of Banking Commission

[Legal Beagles]

The British Bankers' Association agrees with many of the objectives for banking reform set out in the report but believes industry initiatives already under way point towards far better ways of tacking underlying problems.

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Re: BBA response to Which? Future of Banking Commission

The British Bankers' Association agrees with many of the objectives for banking reform set out in the report but believes industry initiatives already under way point towards far better ways of tacking underlying problems. The industry has made many significant changes to the way it operates and the far-reaching nature of regulatory change is there for all to see and cannot by any means be described as a return to 'business as usual' as the report implies.

Action already taken extends not only to banks holding more, better quality capital resources, but to new requirements on the cash they need, governance, risk control, accounting, conduct of business and enhanced supervision. We also support putting arrangements in place to allow an orderly wind down of a bank and clarity in terms of the responsibilities of a bank's Board. The industry also supports deposit protection arrangements and further changes being proposed in Europe which aim to provide even greater protection for customers than those proposed in the report.
We will now review the report in some detail.
Chief Executive Angela Knight said:
"The Which? report is one of many looking at the future of banking. But banking is integral to the modern global economy and, as UK banking is truly international, effective reform needs to work across borders.
"UK banks are world-class. They are a major export earner and pay taxes locally. Our universal banks assist investment and help the economy grow so it is vital decisions taken here do not talk the country down or damage our recovery. We must guard against making it more difficult to do business in the UK as financial services are a major contributor to GDP, employment and tax revenues.
"Currently our big banks provide, under one roof, the seamless services big businesses want. They help international trade work efficiently, aid commerce between countries and improve economic well-being for everyone. Competition in the high street has driven prices down and has provided excellent value for individual customers and businesses alike. Independent studies have shown that customers get a better deal in the UK than in many other countries and are generally happy with the services they receive.
"We all know that extreme proposals grab the headlines - just as we know change is necessary. Banks are very conscious of their responsibility to society. What we need to remember is that change is already well under way - with banks at the heart of reform. "