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Bailed-out and up for sale

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BBC Radio 4's Money Box
Saturday, 7 November 2009 at 1204 BST On Radio 4 and Online

Two of the UK's biggest banks, Royal Bank of Scotland and Lloyds Banking Group, have been ordered by the European Commission to sell off hundreds of branches.

It is a major shake-up, and some big names look set to disappear from our high streets.

Assets being sold off include: Royal Bank of Scotland branches in England and Wales; NatWest branches in Scotland; Lloyds TSB branches in Scotland and a smaller number in England and Wales; the Intelligent Finance internet operation; and mortgage broker Cheltenham and Gloucester.

The Chancellor, Alistair Darling, has said that the creation of new players in the retail banking sector will benefit consumers.

We asked Justin Urquhart Stewart from Seven Investment Management and Ralph Silva, banking analyst at Tower Group, if the enforced sell-off will improve customer choice.

Related information:


Lloyds share offer: To buy or not to buy?

Lloyds TSB branch
HM Treasury holds a 43.4 per cent holding in Lloyds Banking Group

Lloyds Banking Group is going cap in hand to shareholders to raise a massive £13.5bn.

The bank hopes that its latest capital raising proposals will allow it to avoid further participation in the Government Asset Protection Scheme (GAPS).

The banking giant has the biggest private shareholder base in the UK, 2.8 million in total, but should investors take up these new rights?

We asked Justin Urquhart Stewart, director of Seven Investment Management for his view.

Related information:

Fairness for banking customers?

Entrance to the FSA offices, Canary Wharf
The FSA will not regulate overdrafts and credit card lending

There may be new hope for some bank and building society customers who feel they have been treated unfairly.

On Sunday 1 November 2009, the Financial Services Authority (FSA) took over the role of regulation and has to impose tough European consumer laws.

Dan Waters, the FSA's director of conduct risk, said:

"New regulations will put banking customers in the driving seat by setting down clear standards that people can expect from their institution ... If firms fall short of these standards or fail to treat their customers fairly, the FSA will take action."

Money Box decided to road test the new regulations.

In theory, Money Box listeners, whose claims for a refund were rejected after their cards were used fraudulently with the correct PIN, could benefit.

Bob Howard investigated whether the new rules are tough enough.

Related information:

Church of England pensions row

Cantebury Cathedral
The pension scheme for clergy is in deficit

The Church of England has been accused of 'reckless' investment policies after putting its whole £500 million fund in shares.

Urgent changes are being planned but the person in charge of the fund tells Money Box that the trustees followed professional advice.

We spoke to Independent pensions consultant John Ralfe and Shaun Farrell, Chief Executive of the Church of England Pensions Board.

Related information:

Is there a future for Child Trust Funds?

Bucket and spade on beach
4.6m CTF accounts had been opened by September 2009

There is almost £2billion saved up in Child Trust Fund accounts for 4.6 million children.

The latest figures, out this week, show that parents and relatives have saved an average of £289 a year into each account.

But the Liberal Democrats say the scheme should be scrapped, so that the £500million a year it will soon cost, can be spent on reducing class sizes in schools.

The Conservatives would cut the scheme, limiting it to the one in three children who live in households with an income below about £16,000 a year.

We ask David White, chief executive of the Children's Mutual if there is a future for Child Trust Funds?

Related information:

BBC Radio 4's Money Box was broadcast on Saturday, 7 November 2009 at 1204 BST.

The programme was repeated on Sunday, 8 November 2009 at 2102 BST.

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