The former KPMG boss and incoming chairman of the Financial Conduct Authority also told MPs that banks must take more care of customers without any financial knowledge, that he wants more change on pay structures in the financial sector, and that it is not desirable for customers to change their current accounts too often.
Part of the FCA’s role is to boost competition, which Griffith-Jones welcomed, but he also noted that such a goal is a long term one and cannot address short term problems in the credit market.
“Experience has shown that challenger banks will have to pedal extraordinarily fast to make a difference to credit in two years, as opposed to releasing more from the biggest players,” Griffith-Jones told the Treasury Select Committee.
“We should do our bit to free up the authorisations process to whatever extent we can, but the real key to releasing money quickly is with the banks with 80 per cent of the market, not the incremental challengers.”
The incoming FCA chairman also called for more action to help poorly informed consumers.
“A sizeable part of the population are quite innumerate, and that asymmetry of information between the firm and the consumer is quite worrying,” he said.
“If the banks treat everyone as though they cannot add up and put cotton wool around them, consumer protection will invade.
“But if we do nothing, the less numerate will be disadvantaged. So banks should try to segment the marketplace to ensure there are simple products that are available to everyone.”