Commenting on the Government's white paper to re-design the regulation of financial services in the UK

Published:

10/07/2009

Topic:

Press Release,Money

Commenting on the Government's white paper to re-design the regulation financial services in the UK, Ian Williams, spokesperson for moneysupermarket.com, said:

"Consumers want reasonably priced financial products delivered by competitive, stable and secure markets.  We have to acknowledge that there is an inherent contradiction in trying to use more and tighter regulation to deliver this.  Higher capital requirements sound innocuous enough but will inevitably increase the cost of mortgages, loans, overdrafts and so on.  At a time when we have seen reduced competition on the high street new entrants to the market would be welcomed - but, again, tighter regulation actually increases the barriers to entry.

"In the past the Government and Regulators have got involved with product design via CAT standards and Stakeholder Products, neither of which added much value for consumers.  Clearly we'll have to wait and see what the new proposals are for product design and labeling, but they will need to deliver real consumer benefits to be worthwhile.

"Whilst we welcome improvements to the FSCS and pre-funding of depositor protection, here again we must acknowledge that this will feed through into higher priced products.  We also welcome the proposed move to pay compensation gross rather than netting off savings and borrowings from a single provider.  We would like to see further progress on getting quicker payouts from the FSCS."

-ENDS-

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