Three new high-street banks to be created
Following plans being outlined this week for the creation of three new banks, each containing millions of customers and hundreds of branches, which will be offered to the highest bidder, Robin Johnson, partner at international law firm Eversheds comments:
“This is a necessity in order to build confidence in the banking sector and should be strongly supported and welcomed. However, the FSA, Treasury and Bank of England must build consumer confidence through distinguishing the new banks from the ones that have gone before.
“The government should consider a US style Glass Steagall Act whereby the new banks are limited to taking retail receipts and personal consumer or mortgage lending, but should not be allowed to trade either as principal or lend in the wholesale or derivative markets. While the EU will need to approve the split of government funded banks, the overriding consumer benefit principle should make this is a formality.”
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