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UK banking commission demands competition

Monday 25 October 2010 - by Andrew Hickley

The UK's Independent Commission on Banking has written to the government warning that future regulatory bodies must have a “primary duty” to allow competition in the banking sector.

The letter to the Treasury, which was sent following Friday’s monthly meeting of the Commission, argues that the creation of a new Consumer Protection and Markets Authority must emphasise this as a priority.

A shakeup of the UK banking system is set to see the Financial Services Authority split up with a total of four organisations regulating the market from 2012.

The CPMA will be tasked with policing the day-to-day activities of financial firms, alongside guaranteeing consumer protection.

“We would like to emphasise the importance of active competition in a robust and stable banking sector,” the letter reads.


“HM Treasury should ensure that the importance of competition is reflected in the roles of the new financial regulators.

“In particular, the Commission believes that the Consumer Protection and Markets Authority should have a primary duty to promote effective competition.”

The Commission, set up by the government to report on the banking industry, is chaired by Sir John Vickers. It began its review of the banking sector last month. Recommendations are due in autumn 2011.


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