Time to discuss the future of banking

December 17, 2009

New Peter Vicary Smith- Peter Vicary-Smith is the chief executive of Which? The opinions expressed are his own. -

Since the financial crisis in October 2008, a number of reports have looked at the causes and consequences of the crisis and suggested possible solutions, but they’ve all been written from the perspective of bankers.

Ordinary people have been hit hardest by the recession and have been asked to bail out the crippled banks with their taxes but they haven’t been asked how they think banks can change for the better. Failing to ask banks’ customers – for we all have to use banks in one form or another – is missing a trick.

This is why Which? has joined with leading politicians and banking industry stakeholders to establish the Future of Banking Commission – to give ordinary people the chance to add their voice to the debate about how the banking system should be reformed so that we can avoid a repeat of the financial crisis.

As well asking for the views of ordinary people, we will be seeking evidence from a cross section of interest groups including the banking industry, academics, the Bank of England, the Financial Services Authority, Trades Unions and other consumer groups.

The commission will be looking to answer questions concerning the social function of banking, the impact on the public of the financial crisis, how to align the interests of consumers, banks, investors and other stakeholders and how to ensure greater competition in retail banking, among others.

This will take place over three Select Committee-style evidence sessions in early 2010 and will result in a report on the future of banking, which will be published early in the life of the next Government to influence its start up work.

Other members of the Future of Banking Commission include Philip Augar (formerly a Group Managing Director at Schroders’ and now a writer on the financial services industry), Clare Spottiswoode (former DG of OFGAS), David Pitt-Watson (Chair, Hermes Focus Asset Management) and Roger Bootle (Managing Director Capital Economics).

It seems ludicrous that past banking inquiries have ignored those who have been hit strongest by the banking crisis – the ordinary people and the wider interests of society. This is an opportunity to right that wrong. We believe that this Commission is needed to restore trust between the public and the banks.

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