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financial opacity August 21, 2012

Posted by Bradley in : consumers , trackback

Which? says that free banking (in the UK) is a myth, noting that even bank customers in credit are charged for withdrawing money abroad, and argues for more transparency (inviting support for its campaign to ensure the UK’s new regulator is a watchdog rather than a lapdog). The Sargeant interim report on simpler financial products published at the beginning of the month suggested part of an answer, proposing that the first three simple financial products to be approved should include an Easy Access Savings Account and a 30 Day Notice Savings Account. Note no simple current account is proposed – this is about addressing the savings gap:

There has arguably never been a more important time to help people take charge of their finances and manage their money better. With the volatile nature of the global economy, the sharp drop in UK household incomes for 2010-20112 and uncertain employment patterns, having financial provision and protection for today’s needs and the unexpected, is even more of a necessity.
1.3 At the same time there is a change in the nature of the relationship between the individual and the traditional functions of the welfare state. As the Government continues its reforms to promote work and personal responsibility, it is inevitable that more responsibility will be required of the individual to provide a financial safety net for themselves and their family.

But Which? suggests that it’s not that simple for people to make decisions about choosing and managing current accounts, so why not a simple current account?

EuroFinuse, in comments to ESMA about technical advice about possible delegated acts under the prospectus directive, raises some more general questions about inadequacies of summary prospectuses for debt securities and about deficiencies in disclosure with respect to the Bankia IPO in 2011. It’s not clear what EuroFinuse expects ESMA to do with these broad comments made in the context of a focused technical consultation.


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