5 November 2008
The Financial Services Authority (FSA) is planning a radical shake-up of the retail banking industry that would see the watchdog oversee all bank services, including current accounts. At present, current accounts - along with, savings, card services and overdrafts - are subject to voluntary codes, which are monitored by the Banking Code Standards Board (BCSB). But in a consultation paper, the FSA has proposed a new regulatory framework that will see voluntary regulation scrapped and FSA enforcement introduced "across all aspects of banks' relationships with their retail customers". The watchdog claims the existing arrangement is not working in the best interests of consumers as the BCSB does not have the power to fine. "Retail banking is going through a period of rapid change and regulation needs to keep pace with this change," said Jon Pain, the FSA's managing director of retail markets. Under the FSA's proposals, unsecured loans and credit cards would remain under the regulatory control of the Office of Fair Trading. The FSA is an independent non-governmental body tasked with promoting efficient, orderly and fair markets and helping retail consumers get a fair deal.