By Andrei Skvarsky.
The European Banking Authority (EBA) has published draft retail banking guidelines aimed at ensuring that banks in European Union countries pay more attention to the interests of consumers in designing their products.
Designed as a way to “help re-establish and maintain confidence in retail banks”, the guidelines would apply to both manufacturers and distributors of retail banking products – mortgages, loans, deposits, credit cards, payment services, payment accounts and electronic money, according to a statement from the EU regulator.
The proposed guidelines are set out in a consultation paper published on November 10. There will be a public debate on them that is due to run until February 10, 2015.
The guidelines would address “past failings” but would “rather provide a framework for robust and responsible product design and distribution to avoid future cases of detriment”, the statement said.
“Developments in the markets for financial services in recent years have shown that failures in the conduct of financial institutions towards their customers can cause not only significant consumer detriment but also undermine market confidence, financial stability and the integrity of the financial system. In addition, conduct failure can result in direct costs for financial institutions, as a result of redress and compensation pay-outs, penalties, fines, and loss of income,” the EBA said in its consultation paper.
The final guidelines are expected to be published in the second quarter of 2015 and to take effect on April 1, 2016.
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