06 Nov 2014
The Competition Markets Authority (CMA) will examine the working practices of the UK’s largest banks, an investigation expected to last 18 months.
The ‘big four’ banks under scrutiny are HSBC, The Royal Bank of Scotland, Barclays and Lloyds. Alex Chisholm, head of the CMA, will be in charge of the analysis. He said: ‘After carefully considering the consultation responses, most of which supported a market investigation, we remain of the view that there should be a full market investigation into the sector.
‘Effective competition in retail banking is critically important for individual bank customers, small and medium-sized businesses, and the wider economy’.
Concerns have been raised that dominance of the biggest lenders could be placing individuals and small businesses at a disadvantage. Little evidence of customers switching between banks, along with complexity of overdraft charges and slow movement of market shares, are key indicators which have prompted the investigation.
The British Bankers’ Association (BBA) said: ‘Banks are pro-competition – they compete for business every day. This summer we published a series of ideas to help new banks set up and smaller players to grow. We hope these suggestions will be taken up by regulators and politicians’.