The BBA’s push for a PPI claim deadline failed this week as UK
consumer groups expressed their discontent with the banks’ efforts in improving
customer services. Regardless of the BBA’s offer to market the entire
reclaiming process and make the process simpler, Lloyds’ scandal involving
mishandling PPI claims intentionally had reached the high water mark for consumer
groups.
In the UK today, it is a harsh time for the financial
sector. Reports from the Prudential Regulation Authority show that Barclays,
Co-operative Bank, Nationwide, RBS and Lloyds have a shortfall of £27 billion
in capital. There is no coincidence that the missing capital rests on the total
PPI compensation package banks have set aside for the UK with a total of £25
billion.
The shortfall can directly affect the mentioned banks’
ability to lend. Barclays and Nationwide are advised to reduce the risks of
their business because their leverage ratio must go below the standard of 3 and
must do so by 2019. The PRA tasked the two banks to come up with a plan to
reduce their leverage ratios. RBS had the largest shortfall of £13.6 billion.
However, the PRA ensures that once all these measures are
met, the shortfalls that do not reduce the lending to the real economy will not
falter. However, given the large call to claim PPI, it is indeed a very
difficult situation for banks.
