Last year saw the collapse of the Irish property market which led to weakness in the Irish financial sector and the eventual bailout of many banks in the Republic of Ireland. The National Asset Management Agency was set up to manage assets held by Irish financial institutions and the government took more of a hands-on approach with regards to the banking sector and financial services. So what is the government set to announce today?
As the UK government today announced news of a significant investment into the UK Post Office network, which will result in banking services becoming available up and down the country, these very ambitious plans are already under attack. In a bitter blow to the UK government it has been revealed that a joint-venture with Bank of Ireland will see the Post Office hand over 50% of all banking profits but that this is not the only problem for the UK government.
The UK government will today announce plans to expand and improve the 11,500 strong Post Office network in the UK. This comes just months after the UK government attempted to sell off a significant stake in the UK postal system and follows a period when hundreds of UK Post Office branches have been closed or downgraded. So what can we expect in the short term?
The influential Treasury Select committee has today reiterated its call for a radical reform of the UK banking system to prevent similar bailouts in the future. This comes despite the fact that the credit crunch, which eventually led to the worldwide recession, is an event which has only happened on a similar scale once in the last 100 years. There are also concerns that moves to reform the UK banking system could result in UK consumers paying more for credit lines.
It is believed that the UK government is looking at finalising plans for a "People's Bank" which would be based upon the 12,000 strong network of post offices around the UK. This comes despite the fact that the Royal Mail, with the support of the UK government, has been systematically closing many branches up and down the UK. Indeed it was only a few months ago that the UK government was looking to sell off Royal Mail and now it may well become the central plank of the "People's Bank".
A number of MSP's have today stepped forward to demand an investigation by the Office of Fair Trading (OFT) into the Scottish banking arena and an apparent lack of competition. The move has been championed by a number of business associations up and down the UK and when you bear in mind the near collapse of Royal Bank of Scotland and HBOS (part of the Lloyds bank group) it is perhaps easy to see why there is increasing concern North of the border.
In an alarming development it has been revealed that identity theft in the UK increased by 20% in 2009 compared to figures from 2008. While this in itself is worrying, the very fact that 72% of identity theft cases occurred in the second half of 2009 would indicate that 2010 is set to see significant growth in this area of fraudulent activity.
Adam Posen, a member of the MPC, has today stepped into the public domain to criticise competition in the UK banking arena at a time when businesses and consumers are crying out for more liquidity. While he appreciates that the UK is probably ahead of the EU and even the US in terms of tackling various banking problems, he believes that the fact that five major banks in the UK control the vast majority of the market has led to a reduction in short-term competition.
The Office of Fair Trading (OFT) tonight stands accused of abandoning UK banking customers with the announcement that it will be left up to the banking industry to improve practices and bring in new regulations in the short to medium term. The OFT has given the banking industry two years to make changes such as giving customers the chance to opt out of unarranged overdraft facilities and more compassion for those who have fallen into financial difficulty.
The Zürich authorities are said to investigating an alleged theft of data by a former employee of HSBC which has placed up to 24,000 Swiss client accounts at risk. The authorities are looking into HSBC's individual security measures and systems to see if they have been followed to the letter and indeed if any changes can be made to ensure no such allegations crop up in the future.
