Parliamentary group looks at business banking redress

An All-Party Parliamentary Group has published a report looking at compensation schemes for business banking. The report notes that bespoke ad hoc schemes have been established following specific banking scandals but there is no roadmap to give guidance on when and how a scheme should be established. It also notes that the schemes set up to date have almost always been unpopular and have often been accused of ultimately failing those they were designed to help. The report accuses scheme setters of failing to learn from past mistakes and setting up overly complex arrangements which often have inherent conflicts of interest. It recommends the building blocks for a proper compensation framework based on collaboration and transparency, and makes key recommendations of:

• clear and compulsory guidelines for setting up a redress scheme
• creating an arms-length body responsible for setting up and overseeing redress schemes
• creating a Financial Services Tribunal and extending s138D to firms