Former Stock Exchange chairman joins calls for end to free banking
A former chairman of the London Stock Exchange who authored an influential report on business banking for the Blair government has joined the growing chorus of voices calling for an end to free banking in the Britain.
Speaking to the Parliamentary Inquiry into Banking Standards, Don Cruickshank said free banking relied on subsidies from those who do not keep their accounts in credit.
He said this distorted the banking market and made it uncompetitive. Its end, he said, "would be good for the economy and almost all consumers".
Mr Cruickshank also claimed it would be easier for the one million or so people who do not have a bank account to get one.
"A competitive market cannot sustain cross subsidies from one market to another," he said.
Pat McFadden, a Labour member of the inquiry, pointed out it might be hard for members to recommend an end to a service that most Britons value as a result of the activities of traders who offered "bottles of Bollinger" for fixing Libor interest rates.
But Mr Cruickshank said that the inquiry might not have to make such a controversial proposal because the same effect could be achieved by other means.
His report into business banking for the Blair government recommended wholesale changes to the way the market functioned, but was effectively neutered by the Treasury under Gordon Brown.
He urged the inquiry not to allow any similar dilution of the report by Sir John Vickers' Independent Commission on Banking, which called for retail banking operations to be "ring-fenced" from more risky investment banking.
And he called for all regulatory functions – such as compiling Libor and overseeing pricing in commodities markets such as oil or gold – to be stripped from banks.
But Mr Cruickshank none the less urged MPs not to do anything that might damage London's position as one of the world's leading financial centres.
- 1 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 4 Tennis fan suing Australian Open organisers for 'failing to shade spectators' during Murray match
- 5 This crazy skiing video will leave you feeling queasy
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
AirAsia QZ8501: Black box reveals warning alarms 'screamed' before crash, as more bodies recovered from near fuselage of jet
Rob Lowe hits out at White House decision not to meet Israeli leader
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...