FSA consults on Banking Code regulation
by Gill Montia
Story link: FSA consults on Banking Code regulation
The Financial Services Authority (FSA) has published a consultation paper in which it indicates that it wants to take over the functions of the Banking Code Standards Board (BCSB).
The Board currently ensures that UK banks deliver the standards of fair dealing and good banking practice contained in Banking Code and the Business Banking Code, to their customers.
The FSA is challenging this self-regulation process, saying that it may be inadequate because the BCSB cannot levy fines on transgressors.
The Authority’s director of retail markets, Jon Pain, comments that the retail banking sector is going through a period of rapid change and that to keep pace with this change and meet the challenges ahead, the FSA should regulate the wider aspects of everyday banking for all consumers.
Such everyday aspects would include the marketing and operation of current and savings accounts and the way in which banks deal with complaints and customers who are in financial difficulties.
However, services such as unsecured loans and credit cards would remain under the remit of the Office of Fair Trading.
Any change in regulation will apply to building societies and credit unions, as well as banks.