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An inquiry into the banks at last. Great – or is it?

Banks at Canary WharfA new official inquiry into the banks is announced just when Osborne announces that the banking crisis is finally over. In fact it’s still coming to the boil – how does he manage to keep on coming up with these gags? Just 6 years late, you might think. But that’s the least problem. The real issue is that it’s an inquiry into the wrong things.

  • It’s not going to look into the way Libor trading was rigged.
  • Nor into PPI mis-selling that has led to penalties for the banks of up to £20bn.
  • Nor into grotesquely inflated bank bonuses.
  • Nor into how the colossally costly taxpayer bailouts of the banks can be avoided in future.
  • Nor into whether in future those found responsible for worldwide financial crashes should be given a hefty jail sentence.

No, this inquiry will be into current accounts held at banks and whether they and ATM cash machines should in future still be free or have to be paid for. In other words, this inquiry is not about holding the banks to account; it’s about making them more profitable.

So what is the Competition and Markets Authority (CMA), which will conduct the inquiry, worried about? They say they’re concerned about the lack of shopping around between banks by customers? But what’s the problem? There’s the new Metro Bank, Virgin Money, M&S Bank, Tesco, Aldermore and Handelsbanken, as well as the fast-growing Santander and Nationwide, so there’s plenty of options to choose from.

Nevertheless the CMA insists on pushing the idea that if banks changed for current accounts, that would open the way to switching. Nothing like finding a problem where there isn’t one, while ignoring the elephant in the room of whopping big bank abuses.

There certainly are long-standing problems in personal banking, though not the ones the CMA is latching on to. Loyal customers get treated worse than new customers. Complaints about ‘packaged’ accounts are mounting up. The incentives to mis-sell add-on services which led to the PPI debacle are still mostly in place. Account number portability between banks is still not a reality. And there is little reason to believe that the meltdown in NatWest’s IT systems in 2012 won’t occur again.

If you want proof of the political nexus between this Tory government and the Big 4 Banks and how this cabal (not Parliament) runs Britain, you could not have a better example than how the banks have lobbied their misdeeds into the long grass and instead diverted the argument into how they can once again they can increase their profits at the expense of the taxpayer/customer.

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