The Law Society has persuaded the government to allow retail banks to offer derivatives products to business customers to reduce the ‘uncertainty’ caused by fluctuations in exchange and interest rates, and volatile commodity prices.
In presentations to the Independent Commission on Banking and HM Treasury the Society has consistently argued that retail banks should be able to offer derivative products to their business customers.
Law Society chief executive Desmond Hudson said it was a ‘real win for businesses and the wider UK economy’, which would have been disadvantaged by a less competitive banking environment.
‘We played a crucial role by harnessing expertise from our members who specialise in banking law and providing compelling evidence and robust analysis of the impact of the government’s proposals,’ Hudson said.
Following the decision, HM Treasury has tasked the Society, in collaboration with the Association of Corporate Treasurers and the British Chamber of Commerce, with producing a policy framework paper on how retail banks might offer derivatives while also meeting the government’s wider policy objective of increasing stability within the banking sector.
The Society’s Banking Reform Working Party chair Dorothy Livingston said the Society had demonstrated the value of its membership by helping shape the debate on derivatives which has the potential to impact millions of customers. Livingston was called to give oral evidence to the Parliamentary Commission on Banking Standards on 8 November 2012.