Andrew G Haldane: The Great Divide
Speech by Mr Andrew G Haldane, Executive Director and Chief Economist of the Bank of
England, at the New City Agenda Annual dinner, London, 18 May 2016.
* * *
I would like to thank James Antwis, Andrew Bailey, Jeremy Franklin, Jonathan Fullwood, Andrew Hauser, Andrew
Hebden, Alex Holmes, Leanne Leahy, Emma Murphy, Ben Nelson, Laurie Roberts, May Rostom, Pedro Santos,
Minouche Shafik, Emma Sinclair and Paul Robinson for their comments and contributions, and to Gillian Stamp
for conversations on these issues over many years.
In November last year, the Bank of England hosted a so-called Open Forum. This was a new
departure. For the first time in its 300-plus year history, the Bank brought together all of the
main stakeholders in the financial sector: not just policymakers, banks and investors, but
politicians, civil society, businesses, regional representatives, religious groups and the
media. This was a deliberately broad church, with an eclectic congregation comprising
religious zealots, high priests, regular church-goers, agnostics and atheists.
The aim of the Open Forum was to discuss, in an unscripted way, the progress made
towards fixing the financial sector. The Open Forum was an opportunity to hear a different
set of views from a different set of voices: from the customers and users of finance, as well
as the producers and investors; from the often-silent majority of outsiders to finance, as well
as the often-vocal minority of insiders. This made for a very different dialogue.1
Since the crisis, there have been hundreds of conferences on the future of finance. Typically,
these are full-to-bursting with bankers, central bankers, regulators and academics. And,
typically, they are in transmit mode. These are conversations among the elite in the language
of the elite. The Open Forum was a different animal, its cast much wider, its language much
plainer. Attendees were in receive mode.
The most important and compelling message the Bank received at the Open Forum came in
the first session. The Bank had conducted some polling of perceptions of the financial sector
- for example, by asking people what one word best described the future of financial
markets. Among the Bank's usual contacts, including those in the financial sector, the most
used word was "regulated". Many of us will have heard that message from financial insiders
concerned about the perils of over-zealous regulators.
For me, the more revealing responses came from the general public, from the customers,
rather than the producers, of financial services. The word most used by them when
describing financial markets was a rather different one: it was "corrupt". Not far behind were
words like "manipulated", "self-serving", "destructive" and "greedy". I am sure many of you
have heard those messages too. They are certainly ones I have encountered frequently on
my visits around the country.
Chart 1 shows the "word clouds" from the two samples. For the Bank's usual contacts, 69%
of the most-used words were either positive or neutral. For the general public, by contrast,
only 40% were positive or neutral. This is only one poll. And I am not, at this stage, making
any value judgement on which faction is right. But if nothing else, these results suggest a
yawning gap in people's perceptions of finance. It seems very unlikely these word-clouds
form part of the same nephological formation.
To borrow from the title of a recent book by Nobel Laureate economist Joe Stiglitz, these
results suggest to me a Great Divide:2 a Great Divide between the views of financial insiders
and outsiders, between the perceptions of producers and consumers of financial services,
between the silent majority who buy and the vocal minority who sell financial products,
between the echo chamber of the elites and the voting chamber of wider society. They
underscore just how far finance still has to travel to regain its social licence.3
This "Great Divide" is my jumping-off point. I want to discuss the crucial role finance plays in
society and why. I want to discuss the progress made, so far, in restoring trust in finance.
And I want to discuss what further progress might be needed to narrow that trust deficit. That
may call for the financial sector to seek new ways to define and communicate its purpose, its
contribution to wider society, to act as an antidote to the short-term demands of shareholders
and executives.
Yet it would be easy, too easy, to point the finger at finance alone. For this Great Divide
exists not just between the financial elites, but between elites generally and wider society. It
is not just bankers who have suffered a loss of public trust. In varying degrees, this is also
true of big business, government and, yes, politicians and central banks. These lessons for
bankers may be relevant to some of us in this room too.
The role of finance in society
Let me start by discussing why closing the trust deficit in finance matters to the economy and
to society. Whisper it quietly, but a large and well-functioning financial sector is an essential
foundation for a growing and well-functioning economy. That is not an ideological assertion
from the financial elite; it is an empirical fact. Most of the time and in most countries, finance
is a growth-booster not a growth killer.4
The economic textbooks do not get everything right, but on this they are clear and
compelling. Banks and capital markets help finance investment by companies. And that, we
know, is the seed-corn of future growth.5 They also help insure against risk by companies
and households. And that, we know, is the seed-corn of stability.6 In a nutshell that is why,
over long periods of time and across wide ranges of countries, well-functioning finance has
supported wealth-creation and well-being.
The other, more obvious, way of capturing why finance matters is to see what happens when
it goes wrong. Then it can quickly take large chunks out of the capital our societies have,
over time and at great cost, painstakingly accumulated. That crumbling of capital, in its
broadest sense, is the reason financial crises have been about as costly as any event
societies have ever faced historically, war and revolution excepting.
Capital, for these purposes, has more than one face. The collapse of capital during financial
crises shows up, most obviously and immediately, in measures of financial capital (the
values of bonds and shares) and physical capital (the accumulation of buildings, houses,
plant and machinery). And because we assign monetary values to these concepts, and
obsess about them in the media, these losses of capital are clear and visible.
Yet it is another form of capital that may matter every bit as much to wealth and well-being in
society - social capital. There is neither a standard definition, nor a simple means of
measuring, social capital. In general, social capital refers to the relationships, trust and
co-operation forged between different groups of people over time. It is the sociological glue
that binds diverse societies into a cohesive whole.7
The global financial crisis of the past few years provides a case study of how these capitals,
plural, can be decimated by crisis and the toll taken by society. Consider financial capital. At
their peak, the world's 100 largest banks had a market capitalisation of around $4.9 trillion.
That was around 8.5% of annual global GDP. At its trough, this had fallen to $1.4 trillion - a
destruction of financial capital of $3.5 trillion.
Banks have subsequently recovered some of their poise. Nonetheless, the market
capitalisation of the world's 20 largest banks today remains around half its value in 2007.
Their market value lies well below the book value of their assets, with the ratio of so-called
"price to book" currently around 0.8. Put simply, that means many banks are a
valuedestruction machine for investors.
Yet these losses pale by comparison with the losses felt by the wider economy as a result of
the financial crisis. In the UK, eight years on, GDP is still tracking around 15 percentage
points below its pre-crisis trend. Assuming this pre-crisis trend was a reasonable one8, this is
a cumulative income loss of over one year's worth of pre-crisis GDP or £1.8 trillion. For
advanced economies, the corresponding cumulative loss of income is also close to one
year's worth of pre-crisis GDP or $32 trillion. These are simply mind-boggling sums.
And the clock, of course, is still ticking. These losses are unlikely ever to be fully recovered.
Quite how we value the net present value of this continuing stream of losses depends on
how much we discount the income of future generations and how sustainable pre-crisis rates
of growth were believed to be. But even on conservative estimates, it seems possible the
eventual cumulative losses of income could total multiples of annual pre-crisis GDP.
One reason these losses may have endured is because crises have a deep, and irreversible,
scarring effect on an economy's growth potential.9 That may arise because credit-starved
companies are unable to invest or indeed start-up in the first place. Or it may be because
financial crises act as a permanent drag on risk-taking and entrepreneurship, as was also
evident after the Great Depression of the 1930s.10 Either way, perhaps it should come as no
surprise that productivity has flat-lined since the crisis.
Yet it is perhaps along the third dimension - social capital - that the losses arising from the
crisis may prove most enduring. Social capital is inextricably linked to trust. And banking is
quintessentially a trust business. At root, it involves swapping promises to pay. These
promises rely on trust. It also involves, in John Kay's words, "other people's money".11 It is a
fiduciary function.
It is these two features that make any loss of trust in banking particularly damaging and
worrying. And as the New City Agenda's research makes clear, there has been a significant
loss of trust in banks, and hence an erosion in social capital, since the financial crisis.12
Despite a modest recovery over the past few years, it remains at low levels both by historical
comparison and relative to most other industries.
The latest survey by Edelman puts trust in financial services at 51% at a global level. That is
well above the low-water mark of 43% in 2012.13 But it means banking is still not trusted by
around half the population. It leaves financial services at the bottom of the industry league
table of trust. Here in the UK, the fraction of the population trusting banks is lower still, at
around 41%.14
Other surveys of the public tell essentially a similar tale. An Ipsos-MORI survey in 2015
found that little more than a third of those polled believed bankers told the truth.15 A far-larger
fraction believed bankers did not tell the truth. That leaves banking nursing a "trust deficit" of
around 20%. Only estate agents, journalists, government minsters and politicians fared
worse, with trust deficits of 40-50%.
A survey by the Chartered Institute for Securities and Investment (CISI) earlier this year
found that over half of respondents believed it would take over a decade for the culture of
banking to be restored in the eyes of the public.16 And looking at actual complaint cases
taken to the Financial Ombudsman by the public, there has been a relentless rise from
around 100,000 prior to the crisis to more than triple that number today17.
At least until recently many economists like me, when faced with this evidence, might have
shrugged our shoulders. Social capital had no real role in our models of economic growth,
unlike physical capital and human capital. Trust did not butter our parsnips and nor did it
enter our production functions. Recently, however, that orthodoxy has changed and the
importance of trust has become clearer.
Evidence has emerged, both micro and macro, to suggest trust may play a crucial role in
value creation. At the micro level, there is now ample evidence the degree of trust or social
capital within a company contributes positively to its value creation capacity.18 At the macro
level, there is now a strong body of evidence, looking across a large range of countries and
over long periods of time, that high levels of trust and co-operation are associated with higher
economic growth.19 Put differently, a lack of trust jeopardises one of finance's key societal
functions - higher growth.
Those social capital effects appear to be particularly potent when it comes to financial
decisions. Evidence suggests that a lack of trust leads people to retreat from the stock
market and banks and to move towards cash holdings and informal sources of credit, such
as payday lenders and loan sharks.20 That jeopardises the second key benefit of finance to
society - improved risk-sharing by households and companies.
So a lack of trust in finance potentially hobbles both economic growth and financial stability.
That lack of trust is the mirror-image of the perception gap between the financial sector and
wider society, the Great Divide. The Great Divide matters because it signals a pronounced
13
2016 Edelman Trust Barometer. For more information, see http://www.edelman.com/insights/intellectual-
property/2016-edelman-trust-barometer/global-results/.
14
2016 Edelman Trust Barometer. For more information, see http://www.slideshare.net/EdelmanInsights/2016-
edelman-trust-barometer-financial-services-results.
15
For more details, see Ipsos-MORI Veracity Index 2015.
16
For more details, see Chartered Institute for Securities & Investment (CISI) news release 'Bankers pessimistic
about culture change...' (February, 2016).
17
Financial Ombudsmen Service. For more information please see http://www.financial-
ombudsman.org.uk/publications/complaints-data.html.
18
For example, Bloom et al (2012), Guiso et al (2015).
19
For example, Knack and Keefer (1997), La Porta et al (1997) and Boulila et al (2006).
20
Guiso et al (2008) and Zingales (2015).
and protracted erosion of social capital. It puts finance on notice for losing its social licence.
And, unaddressed, that jeopardises future wealth and well-being.
The trust problem
If this trust in finance problem is to be tackled, it needs first to be understood. Why trust is
important, and what determines it, are issues that have occupied the world's greatest minds
for centuries, perhaps millennia. The philosopher Baroness O'Neill from Cambridge
University often draws an important distinction between "trust" and "trustworthiness".21
Although this may sound subtle, it carries important implications.
Seeking to maximise trust may be an unrealistic and, indeed, undesirable objective for
society. In a world of risks and uncertainties, including about individuals' trustworthiness,
people need sometimes to mistrust if they are to avoid bad choices. If the principle of caveat
emptor - buyer beware - is to work effectively, not just in financial services but more broadly,
it requires a constructively sceptical public. Like cholesterol, there is such a thing as too
much trust, as well as too little.
A plausible objective of public policy, then, is not to maximise trust among consumers of
financial services, but to maximise trustworthiness among its producers. Yet the words
"corrupt", "self-serving" and "greedy" are hard to square with "trustworthiness", as are opinion
polls putting bankers at risk of relegation from the trust league table. Opinion polls of the
public are not an objective truth and talk can sometimes be cheap. But it appears these
concerns are not confined to financial outsiders: financial insiders appear to harbour serious
doubts about their trustworthiness and culture too.
As survey in 2013 of financial professionals found, rather remarkably, that over half believed
their competitors engaged in illegal or unethical behaviour.22 A smaller, but still high, fraction
of 24% believed their own company engaged in such practices. Similar percentages believed
their industry did not fulfil its fiduciary function of putting clients' interests first.
The significance of these findings is not the precise percentages, as striking as these are.
More fundamentally, it is because of what they reveal about finance's perception of itself, the
mirror it holds to the social identity of finance. Psychologists and economists have, over
recent years, begun to recognise the importance of social identities in explaining otherwise
puzzlingly irrational behaviour.23
A now-famous study examined the academic performance of Afro-Caribbean boys in US
schools, which was systemically weak almost irrespective of ability. A large part of the
explanation was found to lie in social identities. Specifically, the social identity of young black
boys was defined by doing poorly in class.24 For reasons of self-image and social identity,
these boys systematically underperformed relative to their ability, not wishing to be seen to
be "acting white".
Some of the self-same social identity problems may exist in banking. An experimental study
in 2014 looked at the incidence of cheating in different groups.25 It found not only that
bankers were more likely to cheat, but that this cheating was more prevalent when people
were reminded that they were bankers. They then "acted banker". In other words, social
identity mattered. If that social identity is defined by cheating or by failing to fulfil fiduciary
functions, these behaviours will become self-reinforcing and self-fulfilling.
If this evidence is right, it suggests that the culture problem in banking may be deeply
ingrained, psychologically and sociologically. That still begs the question, however, of what
happened to change the social identity of banking in the first place. The crisis alone is not a
sufficient explanation. Complaint cases taken by the public to the Financial Ombudsman
were rising prior to the crisis, despite bankers riding a reputational high over that period. The
erosion of trust in banking appears to have been secular.
In making sense of these trends, a useful distinction is between personalised trust and
generalised trust.26 Personalised trust refers to mutual co-operation built up through repeated
personal interactions - for example, like visits to the doctor or hairdresser. By contrast,
generalised trust is attached to an identifiable, but anonymous, group - for example, trust in
the rule of law, or government or Father Christmas.
For most of its history, banking has been a relationship-based business. Banks were local.
The local branch manager was a pillar of the local community, serving as part financial
counsellor, part psychological counsellor. Service was customised and personalised. Without
wishing to be misty-eyed about this model, which was far from perfect, what it did deliver was
repeated interactions with customers. This imbued banking with personalised trust, just like
doctors and hairdressers. Meanwhile, its very mystique meant banking maintained a high
degree of anonymous, or generalised, trust among the public too.
Over time, however, this business model was changed fundamentally. Local branches went
into retreat. Between 1997 and 2013, their numbers in the UK fell by over 25%.27 The local
branch manager began to disappear from view. Service became centralised and
transactional. With personal connections loosening, banking began to lose personalised
trust, falling behind doctors and hairdressers. Banking came to rely for its legitimacy, to an
ever-greater degree, on generalised trust.
That was the pre-crisis story. But when the crisis came, it dealt a hammer blow to
generalised trust in banking too. Anonymity gave way to ignominy, blissful ignorance to
blistering resentfulness. In the trust league table, banking plummeted from mid-table
mediocrity to relegation-threatened remorse. Trust in banking had, by turns, suffered a
double-whammy: first a slow puncture of personalised trust as banks retreated from the high
street, then a high-speed blow-out of generalised trust as the crisis broke.
That loss of generalised trust is not confined to the financial elite. Many other entities rely on
generalised trust on the part of the public, from governments to businesses to the media.
They too appear to have suffered a loss of generalised trust over recent years, joining
banking at the bottom of the league table. Their crises have been different - from expenses
to remuneration to mis-reporting - but the result the same.
These trust-busting events have generated, as in finance, a growing perception gap between
the elites and the general public. In 2016, the trust gap between the "informed public" and the
"mass population" hit a new high of 12 percentage points at a global level. The UK results
were even more striking. Not only was the trust gap, at 17 percentage points, higher than in
any other country, bar the US. But this gap has widened progressively since 2012, when it
stood at only 7 percentage points.28
The Bank of England has not been immune to this generalised loss of trust. While in general
it fares pretty well relative to others, the Bank's net trust rating currently stands at 28%.29 The
Bank has a positive trust rating of more than 80% among some members of the public, but
among others it has a trust deficit of more than 50%. As for banks, governments and the
media, this too is quite a Great Divide.
It was writer Norman Douglas who said that "distrust of authority should be the first civic
duty".30 And as someone sometimes described as an iconoclast, I have sympathy with that
sentiment. But, again rather like cholesterol, it is possible to have too much of a good thing.
Taken too far, distrust can be corrosive rather than regenerative. Sometimes bridging that
Great Divide can be a bridge too far.
Progress so far
That begs the question of what can be done to close the gap, to restore trust in the financial
sector, to alter the social identity of banking. There has been no shortage of ink spilled in
crafting a response to the crisis. That includes regulatory response where there has been
root-and-branch reform of both banks' prudential standards - their safety and soundness -
and consumer protection - their offering to customers and clients.
The prudential regulatory reform agenda has been covered extensively elsewhere, including
in speeches and consultation documents by the Bank of England, over the past few years.31
So I shall confine myself to three points. First, this regulatory reform effort has, to my mind,
moved the financial system onto a materially securer footing. That was essential, of course,
given the serious risk of global banks sliding into a financial black hole back in 2008.
There is no single metric that captures this improvement in banks' resilience. One is that the
equity capital of the global banking system has more than doubled to $6.1 trillion since 2007.
Another is that the five largest UK banks' liquid assets are around £100 billion higher than
they were pre-crisis, a rise of more than 50%. A third is that the proportion of financial
markets participants citing bank failure as the biggest risk to the UK financial system has
fallen by an order of magnitude from its peak.32
Second, are these new and higher prudential standards sufficient to prevent a repeat
performance? Truth be told, we cannot know for sure. What is certain is that an academic
debate still rages on this question. A couple of months ago, the Bank hosted a conference
among academics and policymakers to assess progress on prudential standards. Many of
the academics doubted whether sufficient progress had been made to protect against future
crises.33 The prudential bar, while higher, had still they felt been set too low.
Whatever the right answer, I very much welcome this academic challenge. This challenge
was sadly missing ahead of the crisis when prudential regulation was a niche academic
issue. In my view, this absence of academic debate and challenge contributed, in no small
measure, to international prudential standards being set at levels which were, with the benefit
of 20/20 hindsight, not just too low but ridiculously too low. We must not repeat that same
mistake.
So academic challenge, challenge which causes policymakers to think, and possibly rethink,
their calibration of prudential standards, is an essential ingredient of a healthy financial and
regulatory system. The academic debate about prudential standards for banks is not closed;
it has only just opened. And one of the Bank's public policy responsibilities is to help nurture
that policy challenge. Indeed, this was one of the prime motivations behind the Bank's new
research agenda, launched last year.
Third, there is a clear and obvious complementarity between improved prudential standards
for banks and protecting bank customers. Since January 2011, UK banks have paid out more
than £23.3 billion to customers in redress for mis-sold Payments Protection Insurance (PPI)
alone.34 These are astonishingly large sums. On this scale, misconduct towards bank
customers clearly has the potential to cause lasting damage to banks' prudential safety and
soundness.
Given those spillovers, what progress has been made since the crisis in better protecting
consumers? Here too there have been a slew of initiatives over the past few years to
reshape standards within the financial sector, partly in response to episodes of mis-selling and
market-rigging. This has been a collective effort by legislators, regulators, standard-setters
and, ultimately, banks themselves.
The report by the Parliamentary Commission on Banking Standards (PCBS) in 2013, which
involved a number of people here tonight, laid out a very comprehensive reform road-map.
Among its recommendations was to make senior bankers personally responsible for their
actions, aligning rewards with responsibilities. The good news is that this recommendation is
now embedded in statute through the Senior Managers and Certification Regime in the UK.
Just two weeks ago, the extension of that regime to all authorised financial services firms
was given Royal Assent. I think that can be chalked up as a big win.
The PCBS also made recommendations in the area of professional standards and culture in
banking. In response to that, and following a review by Sir Richard Lambert in 2014, the
Banking Standards Board (BSB) was established in the UK last year. As one of its first tasks,
the BSB assessed banks against their own internal standards and sent them confidential
reports on their compliance. The main themes from that exercise were outlined in the BSB's
first Annual Review published earlier this year.35
Following several episodes of misconduct in wholesale capital markets, the Fair and
Effective Markets Review (FEMR) was launched in 2014 to assess their functioning,
overseen by the Bank, HM Treasury and the FCA. It reported last year, making a number of
recommendations including the establishment of a FICC Markets Standards Board (FMSB).36
The FMSB came together last year with a remit to provide guidance on appropriate
standards of conduct in wholesale markets. Encouragingly, most of the major players in
wholesale markets have joined the FMSB. Regulators will use these standards to inform their
judgements under the expanded Senior Managers Regime.
At an international level, the Financial Stability Board (FSB) agreed in early 2015 a work-plan
to reduce misconduct risk, including in the area of key market benchmarks.37 Following a
recommendation in FEMR, work is underway to develop a global code of conduct in the
foreign exchange market. Also in 2015, the G30 issued a report on Banking Culture and
Conduct.38 And in the same year, the New City Agenda published its assessment of progress
towards improving culture among UK banks.39 This is good progress.
The road ahead
These initiatives are important down-payments towards closing the trust deficit. Yet even if
these initiatives are necessary steps, are they likely to be sufficient? The Bank's Open Forum
suggested that would be an optimistic conclusion. So too would the evidence from various
opinion polls and, indeed, from banks' own assessments of their culture. If so, what further
initiatives might help in closing the Great Divide?
It may be tempting to conclude that the trust gap can be closed by simply having a
bettereducated public, one which better appreciates the important role finance plays in supporting
the economy and wider society. On this diagnosis, closing the Great Divide would call for
enhanced public understanding of finance, perhaps through a targeted public education
programme.
Yet as Gillian Guy, CEO of Citizen's Advice, perceptively pointed out at the Bank's Open
Forum, the perception gap may as much reflect the lack of understanding of the public on the
part of those inside finance as a lack of understanding of finance on the part of the public. I
think that is spot on. Closing the perception gap calls for a two-sided effort.
(a) Enhancing public education
A great many people find financial issues difficult and boring. That is a weak foundation for
making good financial choices. At least some of those problems originate in the mental block
many people encounter when it comes to mathematics. Finance is a numbers game. And
research by the Department for Business, Innovation and Skills suggests there are an
incredible 17 million adults in the UK whose standards of mathematics are no higher than
those of a primary school child.40
The way maths is taught may be part of the problem here. For many, maths is a turn-off
because it seems unrelated to their everyday lives; it lacks real-world relevance. Sad to say,
payday lenders have a greater resonance to many people than Pythagoras's theorem. The
abstract nature of mathematics, as taught, leads many children to tune out or switch off
entirely. Others conclude that they simply do not have "a maths brain". This is an educational
scar that can last a lifetime.
Part of the solution may come from making maths relevant to people's lives, to link it to
realworld decisions. And what better set of real-world decisions than financial ones: how to draw
up a monthly budget of debits and credits; how to make sense of an Annual Percentage Rate
on a loan; how to decide between competing savings, pensions and mortgage products.
These are big financial decisions that, if flunked, can have big social, as well as financial,
consequences.
Re-orienting the school curriculum in this, more practical, direction might help in bridging the
information gap. So too would making available courses which help adults, all 17 million of
them, make better financial decisions. As one example of that, the Open University has
recently made available on-line a set of three modules for helping adults better understand
financial matters and, ultimately, make better financial choices.41 Charities like Citizens
Advice are also doing fantastic work in this area.
Of course, part of the reason so many members of the public find finance difficult is because
it is difficult - and, sometimes at least, it is made deliberately so. There is plenty of evidence,
including from the financial crisis, of financial products being made more complex than was
necessary and consumers being charged a premium for buying them.42 This damaging cycle
persists because of the difficulties consumers understandably face when trying to compare
these products.
To give a personal example, I consider myself moderately financially literate. Yet I confess to
not being able to make the remotest sense of pensions. Conversations with countless
experts and independent financial advisors have confirmed for me only one thing - that they
have no clue either. That is a desperately poor basis for sound financial planning.
This problem is one which, if anything, is becoming more acute over time. More of the risk
associated with financial decisions is these days being shouldered, not by the state or
companies, but by individuals. Take pensions. Over the past twenty years, we have seen a
secular shift away from defined-benefit towards defined-contribution pension schemes. That
places the investment risk of pensions squarely on the shoulders of the individual, rather
than companies.
Whatever the merits of these shifts, they underscore the importance of simple,
easilyunderstood financial products for the public if they are to manage these new risks. They also
underscore the importance of adequate information on these products. In 2010, the Money
Advice Service was set up to help provide this information. Following a review last year, this
service is in the process of being replaced. A new body is also being established