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Eversheds comment: In depth and lengthy review ahead on UK retail banking

  • United Kingdom

    18-07-2014

    Commenting on the news that UK banks are facing a full-scale CMA probe, Lesley Farrell, partner at law firm Eversheds, says:

    "The CMA considers that there are similarities in the competition issues which arise in relation to both personal current accounts and SME lending and is proposing a’ joined up in-depth review’ of both sectors. Common issues are high levels of concentration in the markets and significant barriers to entry for newer and smaller banks, low levels of shopping around and switching between banks by consumers and limited transparency in relation to banks’ offers.

    "In the event that a market investigation reference is made in the Autumn, a panel of independent members of the CMA will undertake a detailed and lengthy review with a view to determining whether there are market features which prevent or restrict competition in the supply of these banking services. As such, anyone looking for a swift resolution to the issue may well be disappointed.

    "The CMA has a wide discretion in relation to the remedies it may adopt in order to address any competition issues it identifies but the appropriateness of any remedies will need to be considered in the context of any developments which occur in the market (including regulatory changes) during the investigation period.”

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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