Banks : Start charging on A/C

Banks 'Should Charge For Current Accounts'

Free banking is a "dangerous myth" that encourages banks to increase fees for other services, a top official has said.

By (c) Sky News 2012

High street banks will need to start charging for current accounts to prevent mis-selling scandals, a senior policymaker has advised.

Andrew Bailey, the executive director of the Bank of England and whose signature appears on bank notes from his time as chief cashier, described free banking as a "dangerous myth" which encourages banks to increase fees for other services.

There are 120 million current and savings accounts at UK banks, the majority of which do not have a charge unless overdrawn unlike bank accounts in many other parts of the world.

 Dr Bailey said this free banking makes it hard, for both customers and banks, to link costs to products and services received and that it may have spurred the mis-selling of products like payment protection insurance.

The nation's four largest banks Barclays, Lloyds, Royal Bank of Scotland and HSBC are paying a large part of around £9bn in compensation for mis-selling the loan insurance.

"In short, I think that the reform of retail banking in this country cannot move ahead unless we tackle the issue of free in-credit banking, and have a much better sense of what we are paying for and how we are paying," he said in a speech to the Westminster Business Forum.

But regulatory intervention may be the only way forward, he added.

"It is hard for a single bank to break out of the existing situation without appearing to raise the price of its service to customers.

"And, it is hard for the industry as a whole to break out without appearing to collude. So, it may require intervention in the public interest, not least because it is a way to encourage greater competition."

The comments received a mixed reaction from consumer groups.

Mike O'Connor from Consumer Focus said: "There would be real value in establishing a more open and honest relationship between banks and their customers on what they get, how much it costs and whether others are offering better value for money.

"What mustn't happen is that consumers end up with the worst of both worlds - paying for accounts but still enduring unfair charges, opaque and complex products, mis-selling and poor customer service."

Meanwhile, Dr Bailey, who is due to become second-in-command at the Prudential Regulatory Authority when it replaces the Financial Services Authority as regulator, also suggested the UK base interest rate would remain at 0.5% for the foreseeable future and that domestic banks were prepared for Greece leaving the euro.

How to ease the pre-date jitters

Apart from his wealth, power and world-wide fame, Prince William has proved he’s just like us. Why? Because he’s revealed that the night before his wedding to Kate Middleton he only managed half an hour’s sleep. Bless! So whether you’re royalty or mere mortal, if you’ve got the jitters on the eve of a big date, here are our tips for banishing the night-before nerves.

1. Buff up

There’s nothing like a bit of preening to still that racing heart. Who cares if he’s not going to see your feet or if she’s unlikely to ask for the gun show? A home pedicure, gym workout or wet shave will make you look and feel better.

2. Rehearse

Take a tip from the athletes and try to visualise the date ahead. Research shows that imagining a future scenario and thinking about exactly how you want it to go can help you prepare for any outcome. It also doubles up as a meditation tool, so close your eyes and get thinking.

3. Do your research

Don’t just worry yourself into a nervous wreck – take action! If you’re nervous about what to talk about on the date, surf the web for news and opinion pieces so you’re armed with something to say. If you’re going to a fancy restaurant, call your foodie mate for some last-minute tips, or if you simply want to impress your date, look up some of their favourite music online to show you’ve made an effort to get to know them.

4. Keep your options open

Thinking the next date is the be-all and end-all of your love life is bound to keep you up all night with worry. Hopefully it will go well, but it doesn’t hurt to remind yourself the night before that there are other people out there if this doesn’t work out. Start planning a fun night out with your mates or, if you’ve signed up to online dating, have a look for more gorgeous singles, just in case.

 5. Get a confidence boost

Find someone who thinks you’re amazing and give them a call, even if it’s your Gran! No doubt they’ll be delighted to hear from you, and listening to their cheerleading for Team You is bound to give you a little bit of a boost.

6. Sleep on it

To make sure you get your beauty sleep, have a warm bath or make yourself a herbal tea. Take your favourite book or sitcom to bed to get your mind off the looming date, and enjoy a good night’s shut-eye.