The All-Party Parliamentary Group for Building Societies and Financial Mutuals has today set out important recommendations as to how the Government should deliver its Coalition commitment to foster diversity and promote mutuals.
Following a short inquiry, which included evidence sessions with the Chief Executive of the FSA, Hector Sants, the Financial Secretary to the Treasury, Mark Hoban MP and the BSA, the Group has published its final report Fostering diversity: promoting mutuals.
The BSA particularly welcomes the following recommendations from the MPs:
– The Government should adopt a comprehensive policy strategy to implement its Coalition Agreement commitment to promote mutuals.
– Legislation establishing the new regulatory authorities must include ‘promoting mutuals and fostering diversity’ within the statutory objectives.
– The Government should fully consider remutualising Northern Rock and publish advice that it has received in relation to this matter.
– A Government endorsed ‘Diversity Index’ should be established across the whole financial services sector.
Relating to the final recommendation above, the BSA is today announcing that it has commissioned Oxford University¹ to establish a diversity index to measure the level of diversity in UK financial services markets over time.
The index will measure a number of factors – such as ownership structure, size and geography – across the UK mortgage, savings and current account markets. It will also provide an overall measure of diversity in each of these markets. It is intended the research will be published this winter, with the index then updated annually to assess how diversity is changing.
Commenting, Adrian Coles, BSA Director-General, said:
“Today’s report makes an important contribution to the debate on diversity in financial services. A diverse financial system is better able to weather the strains of the business cycle and the Government has rightly committed to a more competitive banking industry by fostering diversity. We urge them to take on board fully the recommendations of the All Party Group of MPs.
“The independent diversity index which the BSA has commissioned Oxford University to develop is intended to assist the Government in meeting its commitment to promoting diversity, and should be of interest to all those with an interest in a healthy and robust financial services sector.”
