The European Parliament has given the green light to a report that calls for an end to the vicious cycle of social exclusion resulting from not having access to a bank account.

GUE/NGL MEP Jürgen Klute, author of the report, said: "In today's world it is increasingly necessary to have a bank account. If you have no bank account you will have problems getting a job, if you don't have a job you are seldom able to sign a rental contract on an apartment, and if you don't have an address most banks won't let you open an account! It's a Catch-22."

The report sets out improvements to the Commission's original proposal by stipulating that all payment service providers be obliged to offer affordable or free basic accounts to citizens who have no account, contrary to the Commission's draft which stated that only one bank per member state should do this job.

He added: "The adoption of this report sends out a strong message that banking regulation can be used in such a way so as to help the most socially vulnerable citizens. The central element of my report is that access to payment accounts should be a legal requirement. The report also calls for greater banking transparency and more flexibility when it comes to switching banks. The Commission wanted to oblige banks to allow consumers to switch their account in 14 days, but this is not enough to empower consumers. The report includes calls for automated re-routing systems and account number portability."