• Text size      
  • Send this article to a friend
  • Print this article

Radical shake-up of banks on cards

The "big four" banks face being broken up as Britain's competition watchdog sets out plans for a full-scale inquiry that could result in a radical shake-up of the sector.

The Competition and Markets Authority (CMA) found measures so far to open up the market, dominated by Royal Bank of Scotland, Barclays, HSBC and Lloyds Banking Group, had not been effective enough.

It said key parts of UK banking lacked effective competition and failed to meet the needs of personal consumers or small and medium-sized-enterprises (SMEs).

The CMA announced a consultation over its provisional decision to launch a full-scale 18-month inquiry, which could result in a series of reforms.

These range from enhancing information provided to customers to banning complex fees, capping overdraft charges and forcing banks to allow smaller rivals to use their branch networks or payment systems. The CMA said going further and imposing so-called structural remedies such as forcing the break-up of banks could be expensive.

It cited the £1.4 billion cost to taxpayer-backed Lloyds Banking Group for hiving off hundreds of branches under the TSB brand under European rules on state aid.

CMA chief executive Alex Chisholm said: "Competitive personal and SME banking markets are essential to households and businesses. "Significant competition concerns remain which mean that customers may not be getting consistently good service and value from their banks."

Contextual targeting label: 

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.