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business banking news 2004


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November - The Forum of Private Business Survey has published new ranking for the main business banks. Ranking are (with 2002 in brackets

1. AIB (1)
2. Yorkshire (2)
3. Clydesdale (9)
4. HSBC (3)
5. RBS (4)
6. Bank of Scotland (6)
7. NatWest (7)
8. Lloyds TSB (10)
9. Barclays (5)

October - draft September minutes of the Banking Payments Systems Task Force are available. Nothing dramatic.

July - The BNP says Barclays is closing its accounts. Barclays said they wouldn't comment about a customer, but the bank would consider whether there was a "reputational risk" when it was deciding whether to open or close an account.

July - a survey by Standard Life says 52% of small firms have never changed bank. 27% believe they would make more money if they changed more often.

July - an interesting European angle - The European Commission has sent a statement of objections to nine French banks and le Groupement Cartes Bancaires (GCB), which manages the bank card payment system in France, over 'a secret agreement' to carve up the market for the issue of bank cards and restrict competition over charges.

June - The Governor of the Bank of England has criticised slow progress by banks in speeding up clearance of cheques and electronic payments. "The bank will actively explore ways in which that performance can be improved", he said. Good. Mind you, it should already be working with the OFT's Payment Systems Task Force, so is this more than rhetoric? The banks have feebly said that payments are free - yes, but not on business accounts.

March - The OFT has set up its Banking Payments Systems Task Force. It is to "identify, consider and seek to resolve competition, efficiency and incentive issues relating to payment systems, particularly looking at network effects of the existing payment mechanisms. Where appropriate, issues affecting consumers which derive from, or are associated with, features of payment systems will also be considered".

It has issued a questionnaire to canvas views from all interested parties on a broad range of issues relating to payment systems, raised by the Cruickshank and OFT reports. These issues relate to governance, access, pricing, innovation and retail and wholesale price transparency. "The results of this work will inform the decision as to which initial areas should be addressed by the Task Force." Responses should arrive by 16 April.


The Guardian has published a piece about Barclays' payment protection insurance.


February - The OFT has called on banks to scrap the interest-free float the benefit from, and pay interest on balances up to the moment when they are credited to another account using BACS. At the moment they pay no interest on funds in transit and the OFT has estimated this is worth £30m a year to them. The OFT said Self-regulation through the banking codes needs improvement. Customers, not just the banks, should get some benefit from the float. The bulk of the benefit will still go to the banks, however, as customers are paid lower rates on their credit balances than the banks can earn in the wholesale markets.


It seems ages since Patricia Hewitt first promised to reduce the number of business schemes sponsored by her department. At last the government has instituted a review of the SFLGS. It is being led by Teresa Graham, of the Better Regulation Taskforce. She says she is not interested in tinkering, but wants to encourage fresh thinking about the role of a guarantee scheme in the debt finance market. Any input should reach her by April 13 and the report is due at the end of June.

Meanwhile, we have been placing SFLGS business, and are always happy to receive proposals. With our contacts in factoring and leasing, we can put together an overall package.



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