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Last Updated: Saturday, 26 February 2005, 10:56 GMT
Banking reform: Have your say
Don Cruickshank
Don Cruickshank was appointed to review the sector in 1998
Two thirds of customers' problems occur because of the way the banks control the credit card networks and clearing systems, according to the man the Treasury appointed to review the industry.

Speaking five years after the publication of his report, Don Cruickshank said this merited the setting up of a separate regulator.

He feels the government has reneged on its promise of industry reform.

We asked if you felt there was enough competition in the industry, if there is anything wrong with banks making large profits, and also asked for your thoughts on the current clearing system.

A selection of your comments are posted below.

This debate has now closed.

Yes, I do think there should be a separate regulator for banks.

I have been with my bank for over 25 years, and somewhere in the past few years it has changed its policy from not allowing a retail transaction if the account you are using is overdrawn, to paying every single transaction and charging you for the privilege.

I think this is deplorable.

It seems the only way around this is to keep 1000 in your current account at all times to avoid charges. However, I do not want to do this because I would rather keep it in a savings account and earn interest.

I am seriously considering changing my bank after many, many years as I feel I am being used to keep it out of financial trouble while I am being put into financial trouble.
Jayne Cooper

I think the banking industry in the UK is archaic and often unfair. I have been banking in Norway for many years. No-one uses cheques, clearing happens overnight, and swift transfers cost half of what they do here.

I am disappointed by the huge fees levied by banks when you go overdrawn
Per Hansen
You can also pay most bills by simply clicking on a button in your Internet bank, and statements are sent to you in the form of PDFs. If the banks in Scandinavia can do this why can't UK banks?

Also I am disappointed by the huge fees levied by banks when you go overdrawn. This can send you into a spiral of debt, and will hit the poorest hardest. I really do think this is totally unfair.
Per Hansen

The bank clearing system needs to be overhauled.

When I lived in South Africa, I could deposit a cheque via the ATM and funds were immediately available. If I deposited a cheque over the counter, funds were available the next day.

If a country like South Africa can have overnight cheque clearance, why can't England be the same?
Roy Douglas

With internet banking I never pay any bank charges. There is no need to pay any charges if you're careful.

However I do object to the time it takes to transfer money. This is basically a rip-off. There is no need for it. Technologically it can happen instantly. The banks are resistant to it because it makes them money.
Andrew Barber

I think that at their current level of profitability, the UK clearing banks should speed up the payment cycle so that payments initiated by say noon on any business day are cleared that day.

Having to wait three or more business days for clearing is a scandal
James Ward
The banks should do this without any other changes to their terms, i.e. charges.

Having to wait three or more business days for clearing is a scandal!
James Ward

Banks get an unfair share of bad press.

Contrary to what Mr Cruickshank says, I think the high street banks have improved over the last few years.

Money transmission is the one area where there is no competition. Pressure should be put on the banks to do something, otherwise some form of competition or regulation should be introduced.

Effort should not be wasted on updating the costly and out-of-date cheque clearing system. Instead, it should be directed to getting a fast and efficient electronic funds transfer system.

It might be worth paying a modest charge, and so be more in the interest of the banks to provide such a service.

The damage to the economy would be high if banks went bust due to not being profitable
Peter Watkinson
I expect the banks make a loss on quite a number of personal accounts.

Perhaps banks should make a modest charge for each cheque written.

Sometimes I see people writing cheques instead of using their debit card.

The individual is not charged, and may not even realise that it is more expensive to process.

Unfortunately, everybody else is indirectly picking up this cost.

It is important we have a profitable banking sector. The returns help fund our pensions and endowment policies.

The damage to the economy would be high if banks went bust due to not being profitable.
Peter Watkinson

I could not believe that Don Cruickshanks's ideas, many of them such obvious common sense, have been stifled by the government.

Does it - and the banks - really believe the banking public are naive?

The retail banking sector has been taking customers for a ride for far too long and the government turns a blind eye.
Philip Sarell

I am pleased when my bank makes a profit because it provides me with what are in effect free services, as long as I do not go overdrawn: a cheque book, direct debit, and a debit card.

If the bank does not make a profit it has no money to lend to industry to create investment and jobs
Nigel Gastall
The interest it earns on my account balance must be minimal.

I look around the market for the cheapest loans or credit cards. If the bank does not make a profit it has no money to lend to industry to create investment and jobs.

The bigger the profit earned the more tax it pays and the more money the government has coming in. I am not a shareholder.
Nigel Gastall

When I transfer money between my bank accounts and credit cards in Australia using internet banking, it happens instantly, in front of my eyes.

In England, again using internet banking, I have had to wait three days for my transfer from bank account to credit card to go through.

In that time I have no access to my money because it is debited immediately and credited three days later. Why do the British put up with this?
Stephen Vermont

Well done Paul Lewis!

Don Cruikshank's observations were a breath of fresh air, and Paul Smee's were predictably hypocritical.

There is no reason why we could not have a real-time clearance system in a matter of months
Ian H Thain
As an IT professional I know perfectly well that there is no reason why we could not have a real-time clearance system in a matter of months.

Please keep up the pressure on the banks and the government. Somebody has to put an end to all this.
Ian H Thain

With all the news relating to this obscene level of profits in the banking sector, how can we morally justify that so many people these days are obliged to pay for accessing their own money?

Is a charge justified when banks and building societies save so much money by using such machines instead having to employ people to do the same task?
Joao Amaral

Bank profits are obscene and the treatment of customers arrogant.

Bank profits are obscene and the treatment of customers arrogant
Derek Waite
The slow clearance of cheques is absurd and could be done electronically in nano seconds but instead the banks earn millions in interest on our money. I wish there were an alternative to banks.
Derek Waite

When it comes to cheque clearing, this country is a joke.

This is the 21st Century and other countries have had same-day clearance for so long that they have no conception of waiting for cheques to clear. It is the same incomprehension the French have about British medical waiting lists.

The banks thought they would be forced to offer same-day clearance years ago, and they invested in all the equipment to achieve this.

They have had everything in place for at least two years but they are not going to change anything until they are forced to do it.

They will then market same-day clearance as a fantastic "new" service with added value to valued customers.

It is about time Apacs and the banks were pushed, as they are not about to jump first.
Mr M Parker

My husband's salary comes into his account the penultimate day of the month and a sizable transfer to me leaves his account almost immediately.

Someone is making a fortune by these amounts left in limbo
Sue Zatland
It does not appear in my account if there is a weekend and bank holiday sometimes for three or four days. At Christmas it was nearly a week.

Someone is making a fortune by these amounts left in limbo, as well as making it difficult for us to access our money at the beginning of the month.
Sue Zatland

The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.

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