Bank charges and insurance premiums are set to rise after high street banks and insurers were ordered to pay up to £14bn under the terms of Bradford & Bingley’s nationalisation.
Some analysts suggested that the bailout could hasten the end of free banking for current account customers as banks attempt to pass on the cost to their customers.
All banks face huge increases in the levy they pay to the deposit lifeboat, the Financial Services Compensation Scheme, after it borrowed £14bn from the Government to underwrite Bradford & Bingley deposits transferred to Banco Santander.
Banks and building societies will be asked to chip in £900m a year just to pay the interest on the bill. That works out at more than £100m each for large banks such as Royal Bank of Scotland and Barclays.
Financial Times, The Times, Daily Telegraph