The UK’s Office of Fair Trading (OFT) has
launched an investigation into the hurdles new banks face when
entering the retail banking sector in an effort to review
competitiveness in the market.
The watchdog is investigating obstacles new
and small retail banks face when attempting to enter, exit or
expand in the UK after the financial crisis led to substantial
changes to the banking industry.
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But the review falls short of a formal market
study, and instead a spokesperson for the OFT said it was a “call
for evidence” to fact-find ahead of an official investigation.
“It is about building up a picture of what
kind of problems have arisen and then we’ll decide if anything
should be done,” the spokesperson told RBI.
The OFT has invited banks to submit their
views voluntarily on various strategic issues including regulatory
requirements, barriers to achieving scale and barriers to exit.
The move follows a high-profile battle to
reduce unathorised overdraft charges (see RBI 628) which
the OFT lost in the Supreme Court earlier this year.
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By GlobalData“We have recently seen some new players enter
retail banking and we want to understand whether there are any
hurdles to this or to the expansion of smaller banks,” said Clive
Maxwell, the OFT’s senior director for services.
The review will run until 8 July, with
findings expected to be published later this year.
