New agency for government banks criticised by Which?

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New agency for government banks criticised by Which?

Tue 4th Nov 2008

A new company is being set up to manage the government's shareholding in banks.

But the system has been criticised by consumer group Which?, which has called for a consumer voice to be present in the new agency.

Membership of the new UKFI will consist of a private sector chair, three non-executive private sector members, two senior officials from the ShareholderExecutive and the Treasury and a chief executive.

Its purpose will be to protect the taxpayer as shareholders and incentivise banks to good management, through such measures as reducing the potential "reward" for failure.

In addition, it will monitor the conditions for the recapitalisation fund.

This includes the issue of competitive lending to home owners and small businesses at 2007 levels.

In time, the government wants UKFI to manage its dealings in Northern Rock and part of Bradford & Bingley.

John Kingman will be the first chief executive and Sir Philip Hampton the first chair.

But Which? complained that consumers have suffered from savings security concerns and rising costs in mortgages and banking.

It said it was "very disappointing" that there is no consumer input in the new agency's structure.

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