UK banks face competition inquiry --- maybe. When hell freezes over

[David Guyatt]

I've heard for a call for papers for a symposium, but this sounds like a call for payoff money to me (Oh, I'm so cynical). Next year is an election year after all.

The banking watchdog seems to be saying: we may establish an inquiry into your prohibitive practices, but we may not. Tell us what you're going to do about that? To which they will reply discretely and reach a deal behind closed doors.

HSBC is among the banks facing a competition probe


18 JULY 2014
Britain's major lenders are facing a full-scale competition probe over personal accounts and small business banking under plans set out by the watchdog today.

The Competition and Markets Authority (CMA) said customers had not seen enough benefit from efforts to open up the market.
It said it was minded to launch a full-scale market investigation but has given the "big four" banks - Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland - the chance to come up with their own solutions before a formal decision in the autumn.
The CMA said it had found that "essential parts of the UK retail banking sector lack effective competition and do not meet the needs of personal consumers or small and medium-sized enterprises (SMEs)".
It follows two studies in collaboration with City watchdog the Financial Conduct Authority (FCA) into the £8 billion personal current account market and the £2 billion SME current account and lending sector.
The CMA found that concerns remained about competition not effectively serving customers despite measures to make authorising new banks simpler and faster, to make account switching easier and to improve transparency.
It found that it was still too hard for newer and smaller banks to enter the market or expand, with much business remained concentrated in the hands of a few.
There was "very little movement" in the market share of the largest banks - other than as a result of mergers and acquisitions - and many customers saw little difference between the largest banks in the services they offered, the CMA said.
It added that levels of shopping around and switching between banks remained low and that very limited gains had been made by those with the highest levels of customer satisfaction.
This was "not what would normally be expected in well-functioning, competitive markets", the CMA said.
The watchdog also said it was hard for customers to make comparisons between lenders, particularly on complex overdraft charges, limiting banks' incentives to compete, and possibly resulting in higher overdraft charges.
Meanwhile, the extent to which the firms used "cross-subsidy" between different retail banking products and different customer groups using "free-if-in-credit" accounts may also "distort competition".
CMA chief executive Alex Chisholm said: "Competitive personal and SME banking markets are essential to households and businesses throughout the country, and to the success of the UK economy.

[Magda Hassan]

Please leave the brown paper bags under the desk thank you ! ::