Press Release 7th July 2019

7/8/2019

Sunday 7th July 2019

SME warning it will not support banking Dispute Resolution Scheme that excludes majority of its members

SME Alliance would like to comment on the reporting on the terms of the Dispute Resolution Scheme (DRS), which aims to create a mechanism for businesses mistreated by banks in the scheme to obtain redress without recourse to legal action.

SME Alliance would like to make it clear:

Firstly, the Independent Steering Group, which has SME Alliance, the APPG on Fair Business Banking, the Federation of Small Business and seven banks as members, with UK Finance and HM Treasury as observers, has agreed the scheme will consider cases as far back as 2001 (not 2000 as reported);
Secondly, other eligibility criteria is still in discussion. We hope the DRS will be in a position to release a statement in the next couple of weeks clarifying all of the eligibility criteria.

Nikki Turner, director of SME Alliance, says: “Clearly we will not be able to support a scheme that excludes the majority of our members and we are determined to continue to make sure any final scheme is beneficial and available to as many SMEs as possible. We feel positive progress is being made with all stakeholders but there is still a long way to go.”

4 Comments

Eric Topping

7/13/2019 10:02:41 am

Derek Sach was appointed by RBS in 1992. The bank practiced the maltreatment of SMEs prior to 2000, in my case 1998!! I have considerable proof that my company was not insolvent and was wrongly liquidated by RBS. I cannot understand why, in this great country of ours, this has been allowed to happen with no recompense to us victims!!!

Nick Rogers

7/13/2019 05:02:22 pm

Without doubt, the proposed Dispute Resolution Scheme (DRS), must be able to go back to 1986 and compensate victims from when the 'Big Bang' de-regulation of the financial markets was introduced. This was from when the beginning of the crookedly and corruption started.

7/13/2019 05:07:04 pm

Big Bang

The day the London Stock Exchange's rules changed on 27 October 1986 was dubbed the "Big Bang" because of the increase in market activity expected from an aggregation of measures designed to alter the structure of the financial market.
The effect of the Big Bang led to significant changes to the structure of the financial markets in London. The changes saw many of the old firms being taken over by large banks both foreign and domestic and would lead in the following years to further changes to the regulatory environment that would eventually lead to the creation of the Financial Services Authority.

In the UK, Big Bang became one of the cornerstones of the Thatcher government's reform programme. Prior to these reforms, the once-dominant financial institutions of the City of London were failing to compete with foreign banking. While London was still a global centre of finance, it had been surpassed by New York, and was in danger of falling still further behind. Thatcher's government claimed that the two problems behind the decline of London banking were over-regulation and the dominance of elitist old boy networks and that the solution lay in the free market doctrines of competition and meritocracy. The changes were implemented by the Financial Services Act 1986.

Consequences.

The effects of Big Bang were dramatic, with London's place as a financial capital decisively strengthened, to the point where it is arguably the world's most important financial centre. The boom resulted in the relocation of institutions into new developments in the nearby Isle of Dogs area, particularly that of Canary Wharf.

Although the "Big Bang" eased stock market transactions there is a debate in the UK about how far it affected the 2007–2012 global financial crisis. In 2010, Nigel Lawson, Thatcher's Chancellor at the time of the Big Bang, appeared on the radio programme Analysis to discuss the banking reform. He explained that the 2007–2012 global financial crisis was an unintended consequence of the "Big Bang".

He said that UK investment banks were previously very cautious, as they operated with their own money, but after merging with major retail banks, the depositors' savings were put at risk, and according to the programme this led U.S. banks to follow suit.

In 2011 Gordon Brown said that deregulation of the banking sector by the incoming Labour Government of 1997 had also contributed by failing to understand how interdependent the banks were. Speaking at the Institute for New Economic Thinking's annual conference in Bretton Woods, New Hampshire, USA, Brown, Chancellor from 1997–2007, reviewed his changes:

We know in retrospect what we missed. We set up the Financial Services Authority (FSA) believing that the problem would come from the failure of an individual institution," he said. "So, we created a monitoring system which was looking at individual institutions. That was the big mistake. We didn't understand how risk was spread across the system, we didn't understand the entanglements of different institutions with the other and we didn't understand even though we talked about it just how global things were, including a shadow banking system as well as a banking system. That was our mistake, but I'm afraid it was a mistake made by just about everybody who was in the regulatory business.

BREAKING DOWN 'Big Bang'

Before the Big Bang, the LSE was trailing the other major exchanges in the world. At the time, the New York Stock Exchange (NYSE) was the biggest market worldwide, determined by turnover rate. London was only able to turn over 1/13 of the volume transacted by the NYSE. The trading system helped improve London's turnover rate because orders were now accepted by telephone and computer.
In 1983, Prime Minister Margaret Thatcher and her Conservative government decided to go through with the process of deregulating the city of London along with its banks. This was a priority for Thatcher’s government in order to free up the markets and because the LSE was embroiled in an antitrust case brought forth under the previous government by the Office of Fair Trading. At issue were the LSE’s rules on commissions, the independence of jobbers and brokers, and the lack of foreign membership from the exchange. Thatcher’s finance minister, Nigel Lawson, implemented the changes that resulted in the Big Bang on one single day: October 27, 1986.

The Big Bang witnessed many changes in the financial markets, including the removal of fixed commission charges, the distinction between stockbrokers and stockjobbers, and the switch from open-outcry to electronic trading. It was dubbed as such because of the expected rise in market volatility and activity on the day when changes in the structure of the financial market were made.

Financial Service Authority Established by the Big Bang
The changes created in the Big Bang led to even more significant changes in the financial markets throu

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Press Release 7th July 2019

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