The largest UK banks are warning regulators against forced breakups as the Competition and Markets Authority is expected to decide Thursday whether to launch an investigation into the sector.
Reports say the CMA may consider forcing the UK’s largest banks to split up as it looks for ways to boost competition in the market that is controlled by just four players: Barclays, HSBC, Lloyds and RBS. Together, the four hold about 77 percent of the personal account industry, and 85 percent of the small business account industry.
The CMA will decide Thursday whether to move forward with a 18-month investigation into the banking sector. In addition to the dominance of the Big Four, the CMA is concerned over certain business practices, including the banks’ tying of bank accounts to small business loans.
But the Big Four are warning regulators that a forced breakup of their businesses will be costly. RBS chief executive Ross McEwan told reporters that the process is “as complicated as you’ll ever find it, which is why I think people who chat about breaking up banks and distributing them all over the place should have a chat to us at some point in time about just how difficult these things are.”
Similarly, Lloyds head António Horta Osório highlighted the nearly $3 billion it cost to break up TSB.
Full content: The Guardian
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