UK: Regulator probes bank competition in bond and share sales

Britain’s financial markets watchdog will for the first time investigate whether banks are offering firms a fair and transparent service for the billions they earn in fees for arranging mergers and bond and share sales.

After four years of scandal over manipulation in the currency market and of Libor interest rates, the Financial Conduct Authority’s competition review turns the spotlight on primary markets which are crucial to funding of corporate investment.

The FCA had voiced concern in February that customers may not be getting value for money from wholesale banking services – a 10 billion pound sector in Britain.

“The market study will examine whether there are areas of investment and corporate banking services where competition may not be working well,” the FCA said in a statement on Friday.

The review comes at a time of increased emphasis on market-based finance in the European Union as the bloc plans a Capital Markets Union whose aim is to offset the effect of banks reining in lending.

The regulator will look at transparency in how banks manage the sale of debt and equity on behalf of companies, after concerns were raised that they may have incentives to favour certain investors.

Full content: The Wall Street Journal

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.