Speaking at the BSA annual conference in Manchester this morning, Beale told delegates that the mutual trade body continues to call for the FSCS to be revised, but to no avail.
He says: “Proportionately we have more retail funding than any other group of institutions in the UK; then perversely we have to pay disproportionately more for the failure of banks based in Bingley and Iceland.
“This is a moral hazard that must be corrected.
“It is not right that that the prudent pay for the mistakes of the imprudent.”
Beale also warns that potentially there could be unintended consequences as regulation tightens its grip on the financial services sector.
He agrees that higher and better capital requirements will undoubtedly strengthen financial institutions.
But he adds: “There is a real danger of regulatory overshoot – the full consequences of which are difficult to predict but will almost certainly result in increased costs for consumers.
“I trust the tripartite have their collective eye on this issue and I look forward to the results of the quantitative assessment currently being undertaken in the UK.”