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| Version 1 | Version 2 |
|---|---|
| Commission calls for bank reform | Commission calls for bank reform |
| (about 6 hours later) | |
| Regulators, consumer groups and bank customers gave evidence | Regulators, consumer groups and bank customers gave evidence |
| Risk-free "safe haven" accounts guaranteed by the government should be set up as part of a "profound reform of the banking system", a report says. | |
| The cross-party Future of Banking Commission wants improvements in saver protection and restructuring of banks. | The cross-party Future of Banking Commission wants improvements in saver protection and restructuring of banks. |
| It was set up to put the interests of society at the heart of any reforms. | It was set up to put the interests of society at the heart of any reforms. |
| Other suggestions include the creation of an ethical culture in financial services, which would see banks stop paying commissions to front-line staff. | Other suggestions include the creation of an ethical culture in financial services, which would see banks stop paying commissions to front-line staff. |
| The suggestions are designed to ensure any future banking collapse does not not impact on either customers or the economy. | The suggestions are designed to ensure any future banking collapse does not not impact on either customers or the economy. |
| The commission gathered evidence from regulators, consumer groups and business leaders including Bank of England governor Mervyn King, the Financial Services Authority chairman Lord Turner and the current Business Secretary Vince Cable. | The commission gathered evidence from regulators, consumer groups and business leaders including Bank of England governor Mervyn King, the Financial Services Authority chairman Lord Turner and the current Business Secretary Vince Cable. |
| The British Bankers' Association said it agreed with many of the report's objectives, but added that its members were already making changes to tackle underlying problems. | The British Bankers' Association said it agreed with many of the report's objectives, but added that its members were already making changes to tackle underlying problems. |
| In a statement, it added that the industry had made many significant changes to the way it operated and could not "by any means be described as a return to 'business as usual'", as the report implied. | In a statement, it added that the industry had made many significant changes to the way it operated and could not "by any means be described as a return to 'business as usual'", as the report implied. |
| Ordinary people | Ordinary people |
| Executives from the UK's largest banking groups contributed to the commission and unlike other banking inquiries, it also took evidence from consumers. | Executives from the UK's largest banking groups contributed to the commission and unlike other banking inquiries, it also took evidence from consumers. |
| The commission says its recommendations aim to put ordinary people at the heart of a reformed banking system. | The commission says its recommendations aim to put ordinary people at the heart of a reformed banking system. |
| They include reforms to the structure of banks so if they fail, depositors are protected; the introduction of new competition and regulatory regimes that make bank boards responsible for both meeting customers' needs and for their own solvency. | They include reforms to the structure of banks so if they fail, depositors are protected; the introduction of new competition and regulatory regimes that make bank boards responsible for both meeting customers' needs and for their own solvency. |
| David Davis MP, chairman of the Future of Banking Commission, said fatal flaws in the banking structure had almost crippled the world economy. | David Davis MP, chairman of the Future of Banking Commission, said fatal flaws in the banking structure had almost crippled the world economy. |
| He said the commission's proposals should prevent matters coming to such a head again. | He said the commission's proposals should prevent matters coming to such a head again. |
| "We have made recommendations to minimise the conflicts of interest inherent in banking, and to limit the liability of the taxpayer and thereby reduce the risk to the economy," he said. | "We have made recommendations to minimise the conflicts of interest inherent in banking, and to limit the liability of the taxpayer and thereby reduce the risk to the economy," he said. |
| "We also propose a structure and regulatory regime designed to entrench a stable and competitive banking sector for the long term." | "We also propose a structure and regulatory regime designed to entrench a stable and competitive banking sector for the long term." |
| Other recommendations by the Commission include so-called "living wills" detailing how the collapse of a bank would be managed and how customers would be treated, as well as giving banks' boards responsibility for the management and stability of their banks. | Other recommendations by the Commission include so-called "living wills" detailing how the collapse of a bank would be managed and how customers would be treated, as well as giving banks' boards responsibility for the management and stability of their banks. |
| More competition | More competition |
| It says regulation should be used instead to increase competition among banks. | It says regulation should be used instead to increase competition among banks. |
| Improvements to depositor protection are also on the list, including a new class of "safe haven" accounts, which would only be invested in safe assets. | Improvements to depositor protection are also on the list, including a new class of "safe haven" accounts, which would only be invested in safe assets. |
| In return for guaranteed protection, investors would receive low returns. Under the current Financial Services Compensation Scheme, individuals only the first £50,000 protected. | In return for guaranteed protection, investors would receive low returns. Under the current Financial Services Compensation Scheme, individuals only the first £50,000 protected. |
| Peter Vicary-Smith, chief executive of consumer group Which?, who sat on the commission, said consumer protection was a vital part of its work. | Peter Vicary-Smith, chief executive of consumer group Which?, who sat on the commission, said consumer protection was a vital part of its work. |
| "We must never again be faced with a situation where consumers pay the price for the failures of the banking system." | "We must never again be faced with a situation where consumers pay the price for the failures of the banking system." |
| The commission was set up last December by Which? after a proposal by John McFall MP who, as chairman of the Treasury Select Committee wanted to give the public a chance to air its views about the future of banking. | The commission was set up last December by Which? after a proposal by John McFall MP who, as chairman of the Treasury Select Committee wanted to give the public a chance to air its views about the future of banking. |
| Its recommendations will be delivered to 11 Downing Street, with the hope that they will shape government's policy on financial reform. | Its recommendations will be delivered to 11 Downing Street, with the hope that they will shape government's policy on financial reform. |
| The independent think-tank NEF, the New Economics Foundation, which helped write the report, said the recommendations were not far-reaching enough. | The independent think-tank NEF, the New Economics Foundation, which helped write the report, said the recommendations were not far-reaching enough. |
| Tony Greenham, the head of the Business and Finance programme at NEF, said: "These recommendations are a promising start in building a banking system fit for the needs of the economy and society. | Tony Greenham, the head of the Business and Finance programme at NEF, said: "These recommendations are a promising start in building a banking system fit for the needs of the economy and society. |
| "...we must hope that Vince Cable heeds his own advice now he is in government and not that of the vested interests in the banking industry seeking to prevent the break-up of their 'too-big-to-fail' mega-banks." | "...we must hope that Vince Cable heeds his own advice now he is in government and not that of the vested interests in the banking industry seeking to prevent the break-up of their 'too-big-to-fail' mega-banks." |