URGENT NEED FOR REVIEW OF BANKING SYSTEM - CABLE

2.43.03pm BST (GMT +0100) Mon 31st Jul 2006

Responding to the news that HSBC has posted pre-tax profits of £6.7bn, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "There is a serious question mark about the level of profits in the banking sector. In March 2000 the Cruickshank report provided a serious set of broad recommendations for action, yet the Government's failure to act has meant that we are in the worst of all worlds.

"Piecemeal and ad-hoc investigations by the OFT are being relied upon too heavily while the level of charges and levels of service deteriorate.

"With soaring profits seemingly unrelated to the standard of customer service, whether it be overdraft charges or cheque clearing times, there will be increasing pressure for a windfall tax on banks.

"We do not believe that is the right way forward. There is now an urgent need for an overall review of the banking system, a Cruickshank II, whose recommendations must be more seriously investigated."