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Free Banking Coming To An End |
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(17th July 2008)
New research from the Office of Fair Trading OFT points to the demise of free banking, according to independent financial research firm.
Commenting on the OFT's market study of current accounts, Defaqto's principal consultant of banking David Black said: "The underlying theme does seem to point to the eventual demise of free-in-credit banking."
Mr Black doubted banks would start charging for the most basic current accounts.
But with a court decision due on the amount customers should pay in banks fees – which may result in the capping of default overdraft charges – Mr Black suggested that banks would look elsewhere to regain lost revenue.
He reassured savers that developments in banking revenue structures would take time, prolonging the life expectancy of free banking, but expects banks to market added value accounts more aggressively in the interim.
According to the Independent, free banking is a myth.
The paper points to the £8 billion a year that banks earn from current account charges.
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