Kevin Mountford, head of banking at moneysupermarket.com, said: "Self-regulation is wonderful in theory but as we have seen in recent months, it doesn't really work in practice. Consumers have faced one kick in the teeth after another from their banks, as they seek to plug the massive haemorrhage in profits brought about by the ongoing global credit crisis. Recently we've seen banks slash interest rates on their best savings products whilst hiking them up for borrowers in the same breath, and our own analysis shows that the gap between in-credit interest rates and overdraft rates on the most basic of financial products - the humble current account - is getting wider.
"Finally Alistair Darling has stood up to the banks with this new statutory Code, perhaps after getting egg on his face after bailing them out to the tune of billions of pounds, only to have them still not play ball and start lending again. Whilst he doesn't have the power to force them to reopen their doors to borrowers, the new measures do suggest that any bank not playing by the rules will be taken to task.
"Whilst this should, of course, be great news for consumers, who now have the FSA officially policing the actions of banks to ensure they aren't able to get away with sneaky tactics, I would question whether this will truly benefit consumers or be merely another example of another burdensome cost to the industry. The only loser in that case will undoubtedly be the consumer, as costs are inevitably passed on in some form or another."
