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Is the UK government opening up the banking system to foreign participants?

The UK government's decision to force Lloyds bank and Royal Bank of Scotland to sell significant chunks of their assets and their branch networks could play into the hands of overseas financial companies who have long looked at the UK as a potentially lucrative market. The decision, which was effectively taken out of the hands of the UK government by the EU Commission, will see existing participants in the UK market barred from acquiring any assets which are placed on the market thereby leaving a free run for overseas companies.

It is no secret that the UK economy as a whole, and especially the utilities sector, is now dominated by large overseas companies who may not have the best interests of the UK at heart. There are now concerns that this could spread into the UK banking system, where previously the likes of Barclays, Lloyds bank, Royal Bank of Scotland and other UK-based establishments, have been more prominent than overseas counterparts.

However, we now live in a global financial market where barriers to entry across the world have fallen and more companies have in the past looked towards overseas expansion as a way to spread their risk and increase their profile. Maybe the UK market is just going through a similar process although the assistance offered by the UK government, directly or indirectly, may well lead to a hasty injection of overseas companies into the market.

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