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Government steps in to the breach regarding overdraft charges

It has been revealed that the UK government has "advised" Royal Bank of Scotland and Lloyds bank to co-operate fully with the Office of Fair Trading and consumer groups in relation to overdraft charges. The idea is that between the parties they will be able to agree a fairer solution to banking charges which we can then assume the government would attempt to roll out across the sector. However, is it really the place of the UK government to force a private company to "give up" valid income?

The UK government is in a very difficult situation because ultimately taxpayers in the UK have a significant stake in both operations although taxpayers are looking for a fairer banking charges system. The problem now is that the UK government, while indicating that the banks are run on an arms length basis, is now taking a real interest in their operations. This issue has the potential to create major problems with regards to regulations, and the EU commission, where state governments continue to inflict their own opinions and strategies on the private sector.

This is not the end of the overdraft charges saga as there are sure to be a number of challenges along the way, from all parties.

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