Norway’s competition regulator has begun a review of competition in the banking industry, opening the way for a possible full market investigation at a later stage.
The authority said the exercise will examine how rivalry works between banks, with a particular focus on deposit products and home loans, which have a direct effect on household finances.
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“More effective competition can lead to lower mortgage interest rates, higher deposit rates and lower fees”, the authority noted.
It added that relatively small shifts in interest rates can translate into several thousand NOK a year for individual households.
The review is intended to identify and evaluate factors that could influence competitive conditions.
To do so, the regulator will gather material from banks and from other parties with detailed knowledge of the market.
Should the work uncover signs that competition is substantially limited, the authority may move on to a formal market investigation.
Under such a process, the regulator would be able to introduce measures aimed at strengthening competition.
It said cases in other countries suggest that this kind of action can bring clear gains for consumers.
The authority has started collecting information on the banking market, and 14 banks have been selected to submit the required material.
Director General of Competition Mads Magnussen said: “The power to carry out market investigations was introduced last year and is intended to address competition problems that do not stem from infringements of the Competition Act.
“The sector inquiry will provide us with solid and up-to-date knowledge of the banking market, enabling us to assess whether there are grounds to move forward with a market investigation.”
