UK: OFT releases stark findings in banking competition

The Office of Fair Trading has progressed its probe of the UK’s banking industry, releasing findings this week that conclude a lack of competition in the market and weak innovation do not allow competitive lending prices for consumers, say reports.

Small businesses are unable to shop around for loans due to the lack of competition in the market, the OFT found. The regulator is set to be combined with the Competition Commission and begin operations as the Competition and Markets Authority next month.

Earlier reports said the OFT is likely to recommend the CMA continue work within the banking industry.

With the OFT’s latest update, the regulator said it has heard concerns from alternative lenders that banks are squeezing them out of the market for small business loans.

In a statement, OFT chief executive Vivienne Dews said the regulator’s work “suggests there may be competition concerns in this sector” and that the OFT will “hand this on to the CMA to conclude the analysis, and decide on the next steps.”

Reports say the OFT has already brought concerns to the attention of the British Bankers’ Association.

Full Content: FT Adviser

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