Banks call for streamlined regulators
Published 16/08/2007 | 07:55
Britain's banks are preparing a concerted effort to get the Government to streamline regulation after a series of inquiries and interventions into penalty charges and sales practices.
The country's top lenders have asked the British Bankers' Association to draw up proposals for discussion before putting a co-ordinated case for change to the Government.
Angela Knight, the chief executive of the BBA, said: "We are putting together a coherent form of thinking about what the options are for regulation to be better joined-up."
The proposals will probably call for some responsibilities of other watchdogs to be transferred to the Financial Services Authority. When the FSA was set up, it was meant to be a single regulator, but it is one of many, each with different remits and aims, Mrs Knight said. Banks are regulated by the FSA, the Bank of England, the Office of Fair Trading, the Banking Ombudsman and the Banking Code Standards Board.
The BBA's proposals could include transferring the OFT's oversight of credit provision to the FSA and folding the separate Banking Code into the FSA's rulebook. Banks also want guidance on coherent minimum standards for treating customers fairly.
Banks have faced a stream of inquiries and enforced changes, dating back to the Cruickshank report in 2000, which said the industry was uncompetitive, and led to the imposition of interest on current accounts for small businesses.
The lenders' latest battles are with the OFT, which has questioned the selling of payment protection insurance, penalty fees charged on credit cards and fees for unauthorised overdrafts.
The banks and the OFT last month agreed to settle the question of overdraft fees in court, but Sir Fred Goodwin, chief executive of Royal Bank of Scotland, voiced industry frustration two weeks ago when he said resorting to the courts was "very unsatisfactory in a regulated market".
The BBA said banks are not trying to stop regulatory intervention, but that they want clarity about where it will come from and on what terms. It will send proposals to members in the next few weeks to get their views before putting the case to the Government.
A Treasury spokeswoman said: "The UK's financial services regulatory framework is an important part of the success of the City, and the Government keeps it under continuous review."