Cashzilla » David Cameron

Tories to scrap FSA in banking shakeup

Guest Dino — Fri, 28 Aug 2009 14:10:37 +0000

The financial industry is in for a major awakening should the Conservative party receive the keys to power in the next general election says Channel 4 News.

Plans outlined by the party has revealed that one casualty of their proposed financial shakeup would be the Financial Services Authority (FSA) with their power being transferred to the Bank of England.

Under the Conservative’s proposals, the BoE would also have the power to regulate city pay structures, risk complexity and size of financial institutions; including requirements on those which put financial stability at risk to hold large amounts of capital to act as insurance to protect the taxpayer. Meanwhile, the Financial Services Authority would be amalgamated into a new consumer protection body.

Currently the UK financial system is controlled by a triumvirate involving the Bank of England, the FSA and the Treasury and it is this model which David Cameron, the Conservative party leader, believes is inadequate and failed to protect the country’s economy during the recession.

Launching the reform plans, Mr Cameron said: “The decisions that led to this crisis represent a policy failure of historic proportions. We now need deep, wide-ranging reform that matches both the magnitude of the crisis and the scale of the hardship inflicted on the British people.

“That reform must be based on a clear understanding of what went wrong in the first place and a clear determination to put it right.

“I’m afraid the government’s proposals that all we need are a few more tweaks and a little bureaucratic tinkering are totally inadequate and risk preventing a recovery,” he said.

Interesting times ahead in the city should the Tories sweep to power…

Tories want bank charges compensation repaid ‘quickly and fairly’

Guest Dino — Thu, 27 Aug 2009 15:26:57 +0000

A decision regarding the fairness of bank charges might still be weeks away, but customers who have been overcharged by banks should be compensated “quickly and fairly” says Conservative party leader, David Cameron in an Independent online article.

The case, which is currently undergoing discussion in the House of Lords could cost British banks billions of pounds should the Lords rule against them and Mr Cameron is believed to be considering a plan to introduce automatic payback of charges should the Tories win the general election. The Tory leader has already instructed the shadow Chancellor George Osborne to investigate the possibility of automatic compensation which would do away with the need for consumers having to raise a claim.

In an email sent in response to Martin Lewis of website MoneySavingExpert.com, Mr Cameron said:

“Once the legal issues have been resolved I agree with you that bank customers must be compensated quickly and fairly for any unfair charges that they have had to pay. So I’ve asked my Shadow Treasury Team to look at your suggestion that banks should pay money back automatically if the courts do rule that the charges are unfair.”

The full wording of Mr Cameron’s response can be found here.

The Tories’ promise could see the amount of compensation being paid back by banks far surpass the original figures claims Mr Lewis. Should automatic compensation occur, the banks could be forced to pay back as much as £10billion or even more; whereas if consumers were to continue to claim against their banks, the likely payout would be much less – perhaps £2-3billion.

The Lords’ verdict is expected sometime in Autumn.