UK Government Promises Payments Shake-Up
In a speech at JPMorgan Chase, George Osborne, UK Chancellor of the Exchequer, announced that stricter regulation will be put in place to restrict bank’s risky investments. “Our principles are simple: if you do the right thing, government should support and help you, and remove the barriers in your way. If you do the wrong thing, you should take responsibility for your actions,” he said.
Osborne announced four concrete measures to restrict banks’ activities and protect customers: first, a new, more powerful watchdog; second a separation of high street and investment banking activities; third, an overhaul of the system’s culture and ethics; and finally, more choice for customers.
The Chancellor criticized the present system, for being dominated by the country’s four big banks – Lloyds, RBS, HSBC, Barclays – which handle 75% of all current accounts. These declarations emerge just as the country’s Office of Fair Trading called on banks to open up the market. Osborne also announced that customers will be allowed to switch providers in seven days, at no cost, to make it easier for new banks to take on new clients.
Finally, the Chancellor announced that it will take measure to speed up payments and money transfers. « Customers and businesses should be able to move their money round the system much more quickly,” he said.
Whether or not these measures will be implemented, it remains to be seen, but these measures will be discussed in Parliament later this month, and UK politicians will be forced to take a close look at their banking system.