The Week Unzipped: 'Trustworthy' Post Office set to offer customers greater financial choice

BUSINESS Secretary Peter Mandelson has announced a major shake-up of financial services which could be provided by the Post Office after the election, following research showing that consumers trusted it more than banks.

The plans include offering mortgages aimed at first-time buyers that only require a 10 per cent deposit, as well as a children's savings account and a basic current account allowing those on low incomes to manage household bills.

Boosting the Post Office's range of financial services is also part of the government's bid to reform the waning institution.

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However, a Post Office spokeswoman could not say whether these products would be run in conjunction with the Bank of Ireland, which currently provides many of its existing mortgage products and savings accounts.

The Bank of Ireland is regulated by the Irish authorities and is not subject to the same investor protection as that which protects UK consumers.

Shadow business secretary Ken Clarke complained it was too little too late and blamed Labour's inactivity for more than 6,000 post office closures.

Rock hopes dashed

INVESTORS' hopes of receiving compensation for their shares in Northern Rock were dealt a blow last week when independent valuers said the stock was worthless when the company was delisted in February 2008 and the government took control.

Shareholders, who collectively lost millions, claimed that the company was a going concern and have been pursuing the government for compensation.

But valuer Andrew Caldwell of BDO Stoy Hayward said he could find no parts of the business which could have continued independently at that stage.

Insurers in talks

ROYAL London is in negotiations with Royal Liver over a potential merger following a return to profit in 2009.

The UK's largest mutual insurer reported profits of 425 million for last year, reversing an 810m loss in 2008. The rise in profits was boosted by a 25 per cent increase in new life, pensions and asset management business. The company's final salary pension scheme posted a 60m surplus.

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The talks are still at an early stage and Royal London insists there is no guarantee of a deal.

FSA fines top 33m

THE Financial Services Authority has handed down a record 33.1m worth of fines in the past year.

This is a 21 per cent increase on the previous year, underlining the FSA's combative stance following the credit crisis. The organisation had faced criticism that it failed to react quickly enough to the banking crisis.

The penalties include eight fines of more than 1m. The average fine increased by 59 per cent to 789,000. The watchdog has introduced new rules which could treble fines.

Meanwhile, the FSA has charged seven men accused of making 2.5m from insider trading.

The accused allegedly obtained inside information from the print rooms of JPMorgan Cazenove and UBS. Using this data, the men made 2.5m trading in the shares of companies including Reuters, Premier Oil and Biffa.

The charges conclude a 21-month investigation which looked at more than 200,000 files and more than 250 witness statements.