The chairman of the Financial Services Authority (FSA) has said that the UK's free banking system is actually a bad thing for customers.
Lord Turner has suggested that the 7,000 complaints that Britain's banks received each year are partly due to the 25-year-old system of free banking.
He likens free banking to the 'loss leader' tactics used by supermarkets, in which a customer is cross-sold other products that they don't need once they have opened the current account.
Lord Turner said, "The current account ... is essentially a loss-leader ... which banks provide in order to get hold of a relationship on which to sell other products.
"Because of that, there is a desire for them to sell products that are not appropriate. It is also the case [that] a loss-leader makes it more difficult for new entrants because they can't make a profit just out of the core product - they have to immediately be able to cross-sell as well, he added.
When in credit, the vast majority of the UK's 54 million current accounts are free of charge to use.
