UK: CMA seeks to boost competition between retail banks

In a largely expected outcome, the Competition and Markets Authority said fees on overdrawn accounts should be capped, and banks should take it easier for customers to take their business elsewhere. The package of proposals could save consumers £1 billion over the next five years, it said.

The antitrust regulator didn’t make any radical proposals for a sector largely controlled by five lenders—Barclays PLC, HSBC Holdings PLC, Royal Bank of Scotland Group PLC, Lloyds Banking Group PLC and Santander UK. It said that breaking up banks “would not address the fundamental competition problems.”

Some politicians and consumer groups had hoped that start-up and smaller banks would be given a leg up by the CMA when the review started in 2014. The UK government has been trying to foster greater banking competition since the financial crisis. But few inroads have been made into the sector’s concentrated market share in checking accounts, mortgages and small business lending.

“Having more and smaller banks, which customers still couldn’t easily choose between because of lack of transparency on fees and charges, would not significantly improve the market or give customers a better deal,” the CMA said Tuesday.

Full Content: The Wall Street Journal

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