Alistair Darling has proposed tougher new reforms to the financial system specifically targeting UK banks. Stricter regulations will be introduced with a view to giving the customer much greater consumer protection.
In a statement to the House of Commons, Alistair Darling said the financial system needed to ensure robust regulation, and banks and financial institutions should be better managed.
Some of the key proposals included:
- More help for consumers – a national money advice line funded by the banks and a strengthened deposit protection scheme
- Greater competition – the FSA and Office of Fair Trading to ensure that new players can enter the banking market
- Tougher banking regulation – banks required to hold more capital to cover any future losses and more powers for regulators to take over failing banks
- Executive pay – the FSA to report yearly on whether banks have met the new code of conduct on remuneration, and bank boards to be strengthened
The consumers association Which? hailed measures to increase protection for bank customers.
"We’re pleased that the government recognises the need to provide a better deal for consumers," said Which? chief executive Peter Vicary-Smith.
"Warnings about risky products, universally available money guidance and more choice on the High Street will all help to empower consumers in their dealings with the financial world."
This news comes at a time where more and more consumers are becoming aware of the fact they may have been mis-sold a financial product.
Stricter controls over banks should mean an end to issues such as the mis-selling of PPI, consumer credit agreements, whole of life insurance and unfair bank charges etc.