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Which? : consumers back bank ring-fencing plans

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Recent research from Which? shows that a majority of consumers do not think the banks (76%) or the Government (71%) have done enough to prevent another 2008 financial crisis.

And, with just 14% of people saying that the banks have learnt their lesson from the credit crunch, seven in ten consumers (71%) back proposals to separate retail from investment banks, which would safeguard the deposits of customers and essential retail banking services if one of the UK’s big banks was to go bust.

Ring-fencing, one of the key recommendations expected from the Independent Commission on Banking (ICB) in its final report on Monday, has been under concerted attack from some in the banking industry.

Seven in ten people (71%) are not confident that the Government will act in taxpayers’ interests when it considers reforms to the banking industry. Which? is calling on ministers to quickly set out a timetable for implementing the ICB’s recommendations.

As well as measures to prevent another financial crisis, the ICB will also publish recommendations to improve competition in retail banking.

Which? chief executive, Peter Vicary-Smith, says:

“Consumers want to see a firewall between retail and investment banks so if there’s a repeat of the financial crisis the banking services they rely on day-to-day will be protected.

“The Government has a big choice to make on banking reform. It can act in the interest of taxpayers, consumers and the wider economy so that we all benefit from better banking services. Or ministers can act in the narrow interest of banks that want to use their retail customers’ deposits to fund their risky investment businesses

“By immediately putting in place a timetable for meaningful reforms, the Government can reassure the public that banks haven’t been let off the hook.”

Source : Which?