Financial watchdog cannot stop banks from closing local branches, senior official admits

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  • More than 5,800 branches of banks and building societies have closed their doors in nine years

The financial watchdog is powerless to stop banks from closing their local branches, a senior official admitted yesterday.

The bosses of the Financial Conduct Authority (FCA) and the Bank of England were hauled before MPs yesterday after campaigners warned communities across the country were being left stranded.

More than 5,800 branches of banks and building societies have closed since the start of 2015 – with at least 189 more expected to close this year.

FCA head of retail banking David Geale admitted access to liquidity was “vitally important” but admitted the watchdog currently had no powers to intervene or stop branch closures.

While the regulator introduced tough new rules in December making it harder to snatch free ATMs when branches close, Mr Geale said those rules were not expected to come into force until the autumn.

More than 5,800 branches of banks and building societies have closed since the start of 2015 – with at least 189 more expected to close this year.

More than 5,800 branches of banks and building societies have closed since the start of 2015 – with at least 189 more expected to close this year.

The bosses of the Financial Conduct Authority (FCA) and the Bank of England were brought before MPs yesterday after campaigners warned communities across the country were being left stranded.

The bosses of the Financial Conduct Authority (FCA) and the Bank of England were brought before MPs yesterday after campaigners warned communities across the country were being left stranded.

Campaigner Derek French told the Treasury Committee that banks were “rushing into branch closures” before any rule changes.

He added: “They are cracking down and closing as many branches as possible to escape these obligations.”

The committee’s chair, MP Harriett Baldwin, said she feared very few branches would soon be left: “At the rate banks are closing branches, do you think there will be any left by the time you ( the FCA) will offer answers?

Under the proposed rules, Mr Geale said banks and building societies closing the last branch in communities could only have three months to set up a banking center combining the services of several lenders.

If banks have not found alternatives for the community to access the liquidity they need, the regulator could ask them to suspend the closure until a solution is found, Mr Geale said .

It will be a lifeline for vulnerable and elderly customers who rely on local branches and ATMs to access their money.

Treasury Committee chairwoman Harriett Baldwin MP said she feared very few branches would soon be left

Treasury Committee chairwoman Harriett Baldwin MP said she feared very few branches would soon be left

New rules, forcing banks to provide alternatives for the community to access the money they need, will provide a lifeline for vulnerable and elderly customers who rely on local branches and ATMs to access their money.

New rules, forcing banks to provide alternatives for the community to access the money they need, will provide a lifeline for vulnerable and elderly customers who rely on local branches and ATMs to access their money.

Pressure is mounting for the regulator to act, as it emerged last week that almost three million people will live in a “banking desert” by the end of the year.

According to the consumer group Which?, around thirty parliamentary constituencies, or around 2.8 million inhabitants, will no longer have physical bank branches by December.

Seven additional constituencies will be made bankless throughout the year, in addition to the current 23.

According to ATM network group Link, around three in five ATMs will have disappeared from high streets by the end of the decade.

23,000 ATMs are expected to close, leaving only 15,000 ATMs.

Cash use increased for the first time in a decade in 2022, as busy households switched to notes and coins to manage their budgets.

Cash use increased for the first time in a decade in 2022, as busy households switched to notes and coins to manage their budgets.

But despite the mass exodus of these vital services from cities, the use of cash is on the rise.

It rose for the first time in a decade in 2022 as busy households turned to notes and coins to manage their budgets.

Cash payments accounted for 19 percent of transactions in 2022, up from 15.2 percent a year earlier, according to the latest available figures from the British Retail Consortium.

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