Have your say on the future of banking

Former_MSE_Wendy

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif] What's this all about?[/title]
The ‘Future of Banking Commission’, launched by Which? in Dec 09, is an independent group of MPs and banking experts who’ve gathered to discuss the effect of Britain’s banking system on ordinary people and the wider society.

The commission is looking for views from the public on how the banking system needs to change, to include in a report it’s publishing in the spring, which it hopes will influence the next government’s reform on banking.

The members of the commission include David Davis MP, John McFall MP, Vince Cable MP, Which? chief executive Peter Vicary-Smith plus other industry figures.

STOP PRESS: If you can get to London on Thurs 4 Feb a public debate is taking place (details of how to attend in the Which? banking reform MSE News story).

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif] How to submit your views[/title]
There are 6 questions on several banking issues (such as service, products and how the financial crisis has affected you) that Which? is looking for feedback on.

You can either air your views in this forum (if you do this please make it clear which question you’re answering) or, if you prefer, directly onto the Which? website.

1. Impacts of the crisis: How has the banking sector collapse and recession impacted you or your family over the last 2 years?

2. Trust and confidence: How has the financial crisis affected your trust and confidence in banks and the banking system? What, if anything, needs to be done to regain your trust/confidence?

3. Products: Have you bought any financial products that have not lived up to your expectations, or been caught out by the features of financial products, such as small print or extra charges, in the last 5 years? If so, please tell us the product type (e.g. mortgage, current account) and the nature of the problem.

4. Positive views about your bank: What do you like about your bank? What, if anything, could your bank do to improve?

5. Level of service: How would you describe the level of service in your bank? What, if anything, would you like your bank to do differently with regard to service?

6. General reform: If you were in charge, what would be the one reform you would make to the banking system?

Plus, please feel free to discuss others' views below

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3guesses

6. General reform: If you were in charge, what would be the one reform you would make to the banking system?

At the beginning of the global financial crisis, Gordon Brown claimed that the UK Government had to step in and bail out a number of large UK banks not because of losses incurred by their UK operations but because of losses incurred by their overseas operations; and at the same time, Gordon Brown claimed that the Government were not to blame for this situation because they were unable to regulate these overseas operations.

If this is indeed the reality then it must be the case that banking operations in each country/nation be completely isolated financially. In other words, if HSBC USA were to go bankrupt, HSBC UK, HSBC China, etc must have no liability for the USA operation's losses. This would make each country responsible for regulating its own banking industry, rather than being able to abdicate this responsibility in the knowledge that any major problems will be covered by other countries. By taking a lead and enshrining this principle in UK [banking] company law it would no doubt be adopted by all other countries globally, thereby limiting each country's liabilities to its own banking operations.

3guesses

6. General reform: If you were in charge, what would be the one reform you would make to the banking system?

Another reform that I would make to the banking system is that I would not allow any single financial institution to have more than, say, 10% share of any market, including current accounts, savings, personal loans, credit card debt and mortgages.

In practice, this would mean that once any financial institution had secured 10% of any market they could not then take on any more business in that market. This would guarantee a competitive market (it's very difficult for new entrants to compete effectively with Goliaths) and would hopefully go a long way to preventing any institution becoming "too big to fail".

Unfortunately, I suspect there is far too much vested interest for this to become a reality, but I do believe it would be highly beneficial for society.

3guesses

6. General reform: If you were in charge, what would be the one reform you would make to the banking system?


I'm on a roll: I would also have the FSA (or the Bank of England) appoint an independent executive director to the board of every financial institution. This person would need to be changed on a regular basis.