News Summary: 22 February

Feb 25, 2013   //   by Keith McDonald   //   Breaking News  //  Comments Off on News Summary: 22 February

A round-up of the main news stories from this week.

Fixed-Rate Mortgages Hit Record Low

Homebuyers are benefiting from record low mortgage rates as a government lending scheme continues to drive competition between lenders. Average two-year, three-year and five-year fixed-rate mortgage deals are now the lowest in their 24 year history, says financial analysts Moneyfacts. The improvement has been driven by the Funding for Lending Scheme, which has offered cheap finance to banks who must now increase their mortgage books to avoid facing fines.

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Andrew Bailey Named New Bank of England Deputy Governor

Andrew Bailey has been named as the new deputy governor of the Bank of England. Former chief treasurer Bailey, who first joined the Bank in 1985, will join existing governors Paul Tucker and Charles Bean at the beginning of April. Mr Bailey will also head the new Prudential Regulation Authority, as the central bank undergoes a major expansion of its powers this year.

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Lloyds TSB Fined Millions for PPI Compensation Delays

Lloyds TSB has been fined £4.3 million by the Financial Services Authority for delays in paying out compensation to victims of PPI insurance mis-selling practices. The regulator found that between May 2011 and March 2012, a quarter of claimants were left waiting over a month for their compensation payment, while almost 9,000 were still waiting after six months. The bank blamed the delays on the volume of complaints, and the fine arrives just days after former chief Eric Daniels criticised regulators for instigating large numbers of complaints.

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MPs Want Tougher Fines for Banks

And banks should face much bigger fines for their misdemeanours, according to the Treasury Select Committee. MPs said this week that regulators should have the flexibility to impose greater punishments. Currently, the Financial Services Authority allows institutions a discount of up to 30% on fines if they co-operate with investigations. But the committee believes this could undermine the impact of the punishment.

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HMRC Publicly Names and Shames Tax Dodgers

And banks should face much bigger fines for their misdemeanours, according to the Treasury Select Committee. MPs said this week that regulators should have the flexibility to impose greater punishments. Currently, the Financial Services Authority allows institutions a discount of up to 30% on fines if they co-operate with investigations. But the committee believes this could undermine the impact of the punishment.

[Read more]

Don’t miss our latest feature articles this week:

Are AgriBank’s Market-Leading Fixed-Rate Bonds Worth the Risk?

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