Industry experts have predicted that the fees and charges associated with loans and mortgages from banks could soar in the future as a result of sweeping reforms planned by the government to stop a future financial crisis similar to the one that the nation has been plunged into now.

The reforms that are being aimed at the banking industry could see millions of consumers facing higher mortgage and loan charges and fees. This comes after the Chairman of the FSA, Lord Turner, blamed the financial industries for the state of the economy.

Lord Turner has said that tougher rules and regulation could have stopped the crisis from hitting this nation as hard as it has, and that future tougher regulation could help to stop a similar crisis from hitting the nation in the future.

However, industry officials have said that tougher regulation will result in the profits of banks and financial institutions being adversely affected, and that in order to recoup some of these losses banks and lenders will end up charging more by way of fees, charges, and hidden costs to those taking out mortgages and loans.

An official from the British Bankers Association said: ‘The extra regulation will drive up the cost of banking. But we’ve got to accept that we need new regulation.’

The Council of Mortgage Lenders said: ‘The rising cost of regulation will have an impact on consumers.’ Lord Turner stated: ‘We need to make the banking industry a shock absorber in the economy not a shock amplifier.’

Shadow Chancellor, George Osborne, commented on Lord Turner’s views, stating: ‘Lord Turner’s analysis echoes what the Conservative Party has been saying for the last 18 months: that this is not, as Gordon Brown claims, the recession that came from America – but it has its roots in imbalances and the growth of debt.’

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