Ministers 'to get tough on banks'

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Ministers 'to get tough on banks'

Wed 3rd Dec 2008

Ministers have announced measures aimed at making it tougher for banks to treat customers unfairly over lending rates.

As the Queen gave royal assent to the banking bill today, ministers decided to give the Financial Services Authority (FSA) the power to impose unlimited fines on banks if they are not transparent about their lending policies.

The previously voluntary code of banking practice will now be made legally binding, meaning banks could face potentially enormous financial penalties if they fail to comply.

Although the move to enshrine the code in law was not included in the Queen's speech, it is linked to the measures included in the banking bill, which make it easier for banks to borrow money from the Bank of England.

In her speech today, the Queen said: "My government's overriding priority is to ensure the stability of the British economy during the global economic downturn."

She added: "My government is committed to helping families and businesses through difficult times."

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