The right wing Centre for Policy Studies has conducted a survey into the amount of regulation swamping UK banks.It says that the banking industry has suffered 18 different regulatory or governmental interventions since 1997. These interventions, it finds, have consumed large amounts of top executive time and have deflected banks from customer focused activities. Several of the inquiries have overlapped in timing and objectives.
All this, says the study, at a time when technological change has also been challenging the banking system.
‘A Review of the UK Banking Industry’, gives examples of what ‘over-regulation’ is likely to mean. It says plans for new regulation of credit card payment systems means ordinary people could face higher credit card charges of approximately 10 pounds per card per year.
It also points out how banks are expected to bear the costs of reforming the social security benefits system at a cost of at least 400 million pounds a year.
It says banking is not the only sector inundated business with regulation, rather than encouragement to be competitive.
The Conservative Party has also criticised the amount of regulation coming out of Government. It says that 4,642 new regulations were imposed on business by Government last year, which means a new regulation is being introduced every 26 minutes.
The new criticism is a blow to the ‘better regulation’ initiative within Government, which expressly aims to reduce the impact of necessary regulatory changes. See PublicNet Briefing of February 14, 2002.