Adam Posen criticises competition in the UK banking sector
Adam Posen, a member of the MPC, has today stepped into the public domain to criticise competition in the UK banking arena at a time when businesses and consumers are crying out for more liquidity. While he appreciates that the UK is probably ahead of the EU and even the US in terms of tackling various banking problems, he believes that the fact that five major banks in the UK control the vast majority of the market has led to a reduction in short-term competition.
This is a fear which many people have had over the last few months as regulatory costs and the burden of financial backing for the banking arena continues to grow. There is concern that not all independent financial companies will be able to take on these extra costs and we could see various mergers and takeovers which would reduce the number of components in the UK financial sector and ultimately reduce competition.
The last couple of years have shown how difficult to control and how complicated the UK banking arena has become and how a relatively small number of companies control the majority of the marketplace. However, by increasing regulatory costs and the financial liquidity required to trade, in many ways competition is also being reduced and the number of companies trading in the UK financial arena is almost certain to fall.
Share this..
Related stories
UK banks to trial living wills
A small selection of UK banks will this year start trials of so-called "living wills" which have been encouraged by the Financial Services Authority (FSA) in the event of a collapse of a banking institution. In simple terms these so-called living wills will allow regulators to come in and have ready made plans to wind down the operation, exposing every nook and cranny and investment operation in a...
Read MoreBanks 'need help' in money laundering fight
Banks want more support from government and the private sector to help them tackle the growing problem of money laundering, an anti-fraud expert has said.Karen Briggs, global head of anti-money laundering at KPMG, made her comments after research from the accountancy firm revealed that bank spending on investigating money laundering had risen by almost 60 per cent in the past three years.She said...
Read MoreMore hot air from the Treasury or the real deal?
As rumours circulate Whitehall that Alistair Darling and Lord Mandelson are preparing to call in the U.K.'s leading banks for a "chat" there are differing opinions on the likelihood of a successful outcome. The UK government has been particularly critical of the UK banking sector over the last few weeks and many believe that bad blood between the two parties could hinder tense negotiations.
...
MPs to probe banking practices
An influential group of MPs is to investigate claims the country's banking sector is overcharging consumers. The Treasury committee plans to probe competition in the industry as well as the perceived end of 'free' banking. Last year First Direct became the first bank to announced fees for its current accounts. There have been suggestions that banks are looking to new ways to charge customers to co...
Read MoreCo-op announces losses of £1.3bn
11/04/2014 The Co-op bank has apologised to its 4.7 million customers after announcing annual losses of £1.3bn for 2013. Although large losses were expected, the announcement has raised fresh concerns over the future of the bank as it does not expect to make a profit in 2014 or 2015. Niall Booker, Chief Executive of the Co-operative bank was the first to apologise on behalf of the organi...
Read More