Ex-exchange chairman joins calls for end to free banking
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.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.
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 said it would be easier for the one million or so people who don't have a bank account to get one.
"A competitive market cannot sustain cross subsidies from one market to another," he added.
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.
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 market, but was effectively neutered by Gordon Brown. He urged the inquiry not to allow any dilution of the report by Sir John Vickers' Independent Commission which called for retail banking operations to be "ring-fenced" from investment banking.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments