Things are softening up for the bankers. Did we forget so soon?


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The Independent Online

It isn’t hard to identify the winners and the losers from the Competition & Markets Authority’s provisional findings into the current account and small-business banking markets. 

The reactions of various interested parties tell you all you need to know. How about the British Bankers’ Association? It says the CMA’s interim proposals “build on existing measures by high-street banks to deliver new innovative ways of banking” and hails the “pragmatic suggestions to increase awareness of (account) switching”.

But as for the British Chambers of Commerce? The CMA “pulled its punches”. Business will be “disappointed”.  That was also the adjective used by Andrew Tyrie, the chairman of the Treasury Committee, who thinks the consumer ought be made aware of how “free” in credit banking is a myth. 

Meanwhile the CMA tells everyone willing to listen that its interim report is absolutely, positively, not a cop out. 

The only thing these findings are not is surprising. They are perfectly in tune with everything else that has been going on in the regulation of banking since the General Election. Martin Wheatley, the tough as nails boss of the Financial Conduct Authority? Ousted. The “presumption of responsibility” that would have required bankers to prove they had taken reasonable steps to prevent wrongdoing? Dropped in favour of a nebulous “duty of responsibility”. 

Meanwhile, nearly every bank in Britain is applying for “transitional waivers” that they hope will allow them to get out of the requirement to ring-fence their retail banks from the wilder, and riskier, fields of investment and corporate banking. Despite the fact that the rules won’t come fully into force until 2019 and that they were trailed way back in 2011.

What still does surprise (a bit) is how short our memories have become. We are just seven years past a banking-led financial tsunami that very nearly destroyed this country’s economy, and I don’t use that term lightly. Today’s political leaders shrug their shoulders as the steel industry melts down but their predecessors deployed billions of pounds of taxpayers’ money to bail out banking, amid fears that we would be back to stone age barter if they didn’t. 

“Never again” was the cry at the time, and small wonder. There were promises of new rules to make sure of it too. Ministers’ feet were held to the fire by a succession of ugly scandals, left stinking in the sunlight when the flood waters of crisis had subsided. 

These are with us still. Investigations are ongoing into precious-metal price-fixing. In the past few days, a French bank – Credit Agricole – paid nearly $800m to US authorities to settle a sanctions busting investigation. Some of the payments it tried to hide went through its London office. 

Still banks drag their feet on PPI. 

And yet this appalling behaviour now seems to generate merely a resigned shrug. Oh what, banks again? A similar process has been underway in the US, despite its mega-fines, with lobbyists watering down its Dodd-Frank reforms, highlighted by US Senator Elizabeth Warren. 

All the while the masters of the financial universe are getting more comfortable. We may have cause to regret that.