Barclays chief calls for rethink on free banking
LONDON: The concept of free banking should be reconsidered as part of the debate about the future shape of banks in Britain, John Varley, chief executive of Barclays said, The Financial Times reported.
"It is possible that free-if-in-credit banking is a structure that has outlived its time," Mr Varley told a Question Time-style debate organised as part of the government-appointed Commission on Banking's review of the sector.
The concept, which Mr Varley described as "idiosyncratic by the standards of the world", was "worth examining", he said.
The commission was holding its third public debate as part of a 15month exercise to examine the structure and competitiveness of the UK banking sector - part of efforts to en sure that taxpayers are protected from future bank collapses. The process is due to conclude next September.
After events in Leeds and Edinburgh, Thursday's debate - moderated by Sir John Vickers, commission chairman - boasted by far the biggest hitters in terms of panellists. Besides Mr Varley, it comprised Douglas Flint, who is now chairman of HSBC having previously been finance director; Luke Johnson, the serial entrepreneur; and Richard Lambert, director-general of the CBI.
Mr Varley's comments follow suggestions by Lord Turner, Financial Services Authority chairman, last week that free banking encouraged inappropriate cross-selling of other financial products from which banks could make a profit.
"It is very important to distinguish between equity injections and systemic liquidity injections," he said. Barclays has often stressed that it did not benefit from taxpayer support. -PB News