Banks should be allowed to close branches

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It’s hard to understand why anyone would feel so emotional about it. With its faded colours, separated staff, dreary clusters of mortgage flyers, and those short, often broken wire-tap tanks, it’s hard to believe there was any town so dull that a branch of NatWest or Barclays actually energized it.

However, there is no doubt that many people are vehemently opposed to closures and worry about how people will continue to access basic banking services should an outlet close.

The ingenious solution from the Financial Conduct Authority (FCA) is to consider new rules that will give it the power to fine banks for shutting down parts of their network, and in some cases preventing them from doing so. Regulators are usually – surprise, surprise – very keen on more power, especially if it means they can meticulously manage what should be a business decision.

This would be a crazy move. Here’s why: First, the respective branches by definition are no longer financially viable (duh – that’s why they are closed). Although few people still use it, it is not enough to cover all the costs of keeping it open. Remember that running these things isn’t cheap. There’s rent to be paid on the building, labor rates, heating, security, and staff (and even the short biros eventually have to be replaced).

In effect, we are putting companies in a position where they have to maintain an operation that loses money, or faces a fine.

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