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UK: Watchdog cracks down on anti-competitive banking practices

By  |  April 14, 2016

Banks unfairly favour big fund managers when it comes to doling out shares in company listings and this must change, Britain’s Financial Conduct Authority said on Wednesday.

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    The watchdog’s findings are from a study that started in May into competition within investment and corporate banking, a sector that generated $17 billion in gross fees in the United Kingdom in 2014.

    The regulator also wants to end contractual clauses that tie clients to a bank for a range of services. The study found cross-subsidies between corporate and investment banking lead to a bundling of services, where customers can end up using the same bank for several products.

    “Our study shows that many investment and corporate banking clients are getting a service they want, but we have also identified some areas where improvements could be made,” FCA director of competition, Christopher Woolard, said.

    “Overall, this is a package of proportionate measures intended to remove potentially anti-competitive practices,” Woolard said in statement.

    The 186-page report starts a public consultation into changing how parts of the market work, such as the way companies are floated using initial public offerings.

    Full Content: Financial Times

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