City minister Lord Myners has called for banks to shift their internal culture towards “oldstyle” banking, with more decisions in branches and grea ter efforts to engage with the public.
At the Which? hearing last week, Myners said a radical shift in the way banks conduct their business is essential. He said: “I want to see the return of the old-style bank manager, with more decisions taken in branch,
and town hall meetings with the public.” Without it, he said, there can be little hope of an improvement in the way that consumers view the financial services sector.
He also called for the owners of big banking institutions to play a more active role within the banks. He said: “It is quite evident that our major banks were ownerless corporations, they did not have engaged owners who behaved as economic models required them to behave.”
Myners was critical of the FSA’s failure to spot the payment protection insurance scandal. He said: “The evidence that PPI was very profitable ought to have indicated to the FSA that perhaps this market is not functioning and a market that is not functioning may well have consumer disadvantage at its core. One
would have thought that, perhaps with hindsight, the FSA should have seen PPI as being a potential abuse.”
FSA chairman Lord Turner said the FSA’s powers to change banks are not limitless. He said: “We simply do not know if we have the tools to change the banking culture. We have pursued the treating customers fairly principle and can push the banks to change but they will have to want to change.”