Banks battle uneven playing field

The UK banking industry is fighting a lobbying and PR battle against state guarantees of savings in Europe.

Canary Wharf: financial centre
Canary Wharf: financial centre

The industry wants to highlight the competitive disadvantages in the UK that it believes will result from Ireland's guarantee of all retail deposits and a similar move this week by Germany.

UK banking chiefs argue that state guarantees of savings create an uneven playing field, particularly given that Allied Irish Bank, Anglo Irish Bank and Bank of Ireland all have branches in the UK.

The response from the UK industry has been co-ordinated by the British Banking Association (BBA), which has lobbied senior governmental figures about the issue in Ireland and the UK. Last Friday the UK government raised the limit of guaranteed funds to £50,000 from £35,000, but the industry is hoping for a clearer resolution.

In the UK the PR message has got through that the vast majority of the public are covered and a Northern Rock-style bank run has been avoided. ‘You have to reiterate stability to the public,' one bank's head of media relations said. ‘Make sure staff are equipped to answer questions and are very clear about the key message of the organisation. There is a temptation to increase savings rates to compensate, but that could look like panic.'

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in