Seven-day bank account switching from September

Posted at July 8, 2013 | Categories : News

The Government has launched a raft of new measures aimed at taking the UK banking sector from rescue to recovery, based on the main findings of the Parliamentary Commission on Banking Standards’ report.

Competition will be strengthened by:

• Providing the Prudential Regulation Authority with a secondary competition objective to strengthen its role in ensuring we have banking markets with effective competition.

• Introducing seven-day account switching from September this year – the Government will ask the new payments regulator, once established, to urgently examine account portability and whether the big banks should give up ownership of the payments systems.

In addition, bankers will face new sanctions with any legislative changes to be included in the Banking Reform Bill, which is currently before Parliament.

These include:

• Introducing a criminal offence for reckless misconduct for senior bankers. Those found guilty could face a jail sentence.

• Working with the regulators to ensure bankers’ pay is aligned with their performance, including allowing bonuses to be deferred for up to ten years and enabling 100% claw back of bonuses where banks receive state aid.

• Introducing a tough new regime governing the behaviour of senior bank staff and new rules to promote higher standards for all bank staff.

• Reversing the burden of proof so that bank bosses are held accountable for breaches within their areas of responsibility.

• Working with the regulators to strengthen corporate governance to ensure that firms have the correct systems in place to identify risks and maintain standards on ethics and culture.