On February 16, the Office of Fair Trading (OFT) published a speech by its Chief Executive, John Fingleton, addressing issues with respect to competition in the UK banking sector. Mr. Fingleton addressed several issues which had been identified in various previous governmental or regulatory inquiries and investigations of the UK banking industry. He noted that UK banks had made certain incremental changes and improvements but observed that concerns still remained about the competitive structure and performance of the UK banking market.
Mr Fingleton concluded the speech by stating that the UK banking sector is now potentially at a turning point due to the possibility of greater competition from new entry and changes in the approach to regulation by the successor regulators which will replace the Financial Services Authority in 2013. He stated that banks must be more active in delivering change and must enabled the OFT to see evidence demonstrating that the market dynamics of entry and account switching are sufficient to drive stronger customer-focused competition. Unless this happens, the OFT will consider making a reference to the Competition Commission for it to conduct a full market investigation.
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