View more on these topics

BBA: Banks are ‘frightened’ to develop new products

Anthony Browne BBA Conference 2012 480

British Bankers’ Association chief executive Anthony Browne (pictured) says banks are “frightened” of developing new products because of regulatory uncertainty.

In a warning to the incoming Financial Conduct Authority, Browne says “regulatory over-reaction” risks restricting access to markets to the detriment of consumers.

Speaking to Money Marketing, he says: “If the banking system is under the cosh so much that it is frightened to develop new products or sell existing products then it is not a healthy financial system.”

He points to interest-only mortgages as an example of where banks have withdrawn their offering because of fears over future misselling claims.

He says: “Banks have been stung by the enormous bill from payment protection insurance misselling and the perceived retrospective change of the rules. The public figures are around £12bn but it is rising all the time.

“If banks pull out of interest-only or other products because of uncertainty then it is ultimately bad for consumer choice. The FCA needs to focus not just on controlling risk but ensuring access to market products too.

“Our appeal is for the regulator to bring absolute clarity around what banks can and cannot do. There is also a lack of clarity around caveat emptor and the rights and responsibilities of customers.”

John Charcol senior technical director Ray Boulger says: “I certainly subscribe to this view. It is important that the regulator deals with macroprudential regulation and does not get involved in the minutiae of the details.”

Click here to read Money Marketing’s full interview with Anthony Browne


News and expert analysis straight to your inbox

Sign up


There are 10 comments at the moment, we would love to hear your opinion too.

  1. Not sure what desert island Mr Browne has been living on for the past 4 years! As an ex-traditional banking employee, I’m not sure that restricting what Banks sell to their customers will be to the detriment of those customers – in my opinion, the reverse will in fact apply!

  2. If the banks had proactively sought out all the PPI clients rather than waiting for the claims companies to increase the bill then they would have save billions. In the pension review you had to write to all possible claimants so why not in this case?

  3. I wholeheartedly agree.

    I am a sophisticated consumer. I understand how interest only works and yet I have to deal with, to be brutally honest, people selling investment products from mainstream providers who know far less than I.

    So whilst I have dealt with my bankers and lenders over many decades with a perfect repayment history, I am treated an an imbecile when it comes to a simple interest only mortgage product.

    Perhaps disclaimers after advice is the way to go. Something has to give, because at present, people like me are faced with higher costs to access non mainstream lenders with interest only products as traditional routes remain closed.

    Madness, treating everyone as stupid as the lowest.

  4. PPI was a fraud. Do not let confuse this with Interest only, which is a investment/financial management decision. All rationality has been lost in financial services in pusuit of people covering their own backs. No interest only mortgages, but the same client can rent a property for twice the monthly commitment under a mortgage. For a streached family is it better to have an interest only mortgage, or rent, which they cannot afford and risks homelessness? As long as the client is made aware of the implications, they should be able to make their own decisions.

    Regulators and the law now seek to defy actuarial and medical facts by the ‘no geneder’ ruling, defying the very principles of insurance, the rational assesment of risk. Maybe the refusal of a claim should be made an offence against one’s human rights. Think of the savings in bureaucracy, paperwork and litigation …, a win/win?

  5. Sounds like good news to me!

  6. I agree with James Darmetty we are a real nanny state with government acting liking Nannie to consumers who should know better!! In my view PPI, Endowment misselling etc were the fault of the purchasers.

    People who like me who actually read the small print are penalised whilst the idiots who act like sheep believing everything in the papers and staff in banks who are trained to the same level as a checkout operator.

  7. There are two statements that sums up being an IFA today in this article:

    “There is also a lack of clarity around caveat emptor and the rights and responsibilities of customers.”


    ….. the perceived retrospective change of the rules.

    Both are accurate statements and were designed to benefit the consumer and the FS Markets. In reality they have undermined both. I wonder if the regulators will now see the error of their ways??

    I am not holding my breath ….

  8. Quite right Greg; that could be a fatal error!

  9. UK plc does not need any more products from banks.
    They are good for bank accounts only and not to be trusted to provide any other services.

  10. Be afraid, be very afraid…..

    Evidently, they are. But is the problem not the products themselves but the way in which they’re all too frequently sold? PPI, for example, is not intrinsically a bad product but the banks created a rod for their own backs because of the way in which they mass mis-sold it.

    A few weeks back, I dined out with a former colleague who’d had PPI, had claimed on it legitimately and successfully and was then proactively offered compensation by the organisation through which he’d bought it. That’s crazy and, of course, all that organisation’s other customers will ultimately pay his compensation bill.

    Is that really what the FSA wanted to achieve? All it does is damage the system collectively.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm