Impact of the Current Financial Crisis. Given that changes in the provision of a Basic Bank Account are by their nature focused on the banking industry and the current financial crisis is centred in that industry, we need to consider the impact of the current financial crisis on the policy options. The issues surrounding provision of a Basic Bank Account precede the current financial crisis. However the crisis makes intervention more necessary, given an increase in need through an increase in unemployment (a characteristic of vulnerable groups). At the same time, new and changing regulatory pressures on banks probably make them less predisposed to adopting additional measures to provide universal Basic Bank Accounts voluntarily. Impact of the Financial Crisis from the Banking Industry’s perspective The current financial crisis in many European and other advanced countries has decreased the availability of credit and meant that banks have generally retrenched as individual institutions rebuild their balance sheets following this period of substantial losses and/ or reduced earnings. It is also clear that whilst some progress has been made through debt write-offs and capital injections there are still residual threats to stability which are often difficult to forecast, as for example with recent concerns over sovereign debt levels. A new era of more cautious banking is emerging, and it is therefore likely that the supply of Basic Bank Accounts is unlikely to increase, purely through market forces. Impact of the Financial Crisis from the Consumer’s Perspective From the consumer perspective, it is likely that one of the most important impacts from the financial crisis is an increase in the need for action, given the increase in unemployment and that the overall economic downturn will impact vulnerable groups such as (some) migrants, the homeless, and those on low incomes. These groups characterise the financially excluded. The EU27 unemployment rate was 9.6% in February 2010, compared with 8.3% in February 2009. (Eurostat: euroindicators February 2010). These factors are likely to increase the demand – or at least the need – for a Basic Bank Account Accordingly, overall, the impact of the credit crisis is likely to mean an increased need for the provision of a Basic Bank Account to vulnerable consumer groups. At the same time, because the banking industry is already experiencing an increase in regulation, it may be reluctant to accommodate more demands. In this section we summarise the main findings...
