Big Four banks could face break-up

Big Four banks could face break-up

HSBC is among the banks facing a competition probe

HSBC is among the banks facing a competition probe

RBS and other banks have been given chance to come up with solutions before the Competition and Markets Authority launches a full probe into personal accounts and small business banking

RBS and other banks have been given chance to come up with solutions before the Competition and Markets Authority launches a full probe into personal accounts and small business banking

First published in National News © by

Britain's competition watchdog said it would not rule out ordering a break-up of the "big four" banks as it set out plans for a full-scale inquiry which could result in a radical shake-up of the sector.

The Competition and Markets Authority (CMA) found measures so far to open up the market, dominated by Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland, had not been effective enough.

It said key parts of UK banking lacked effective competition and failed to meet the needs of personal consumers or small and medium-sized enterprises (SMEs).

The CMA announced a consultation over its provisional decision to launch a full-scale 18-month inquiry which could result in a series of reforms.

These range from enhancing information provided to customers to banning complex fees, capping overdraft charges and forcing banks to allow smaller rivals to use their branch networks or payment systems.

The CMA said going further and imposing so-called structural remedies such as forcing the break-up of banks could be expensive.

It cited the £1.4 billion cost to taxpayer-backed Lloyds Banking Group for hiving off hundreds of branches under the TSB brand under European rules on state aid.

But it said the problems facing the sector were so serious and long-standing it "cannot rule out the possibility that structural remedies may be necessary".

CMA chief executive Alex Chisholm said: "Competitive personal and SME banking markets are essential to households and businesses throughout the country, and to the success of the UK economy.

"However, our studies have found that, despite some positive developments, significant competition concerns remain which mean that customers may not be getting consistently good service and value from their banks."

Business Secretary Vince Cable welcomed the announcement, saying: "This is an issue that really matters for the real economy - constraints on banking competition mean less choice for both consumers and small businesses seeking finance to grow."

It follows two studies in collaboration with City watchdog the Financial Conduct Authority (FCA) into the £8 billion personal current account market and the £2 billion SME current account and lending sector.

The CMA said concerns remained about competition not effectively serving customers despite measures to make authorising new banks simpler and faster, to make account-switching easier and to improve transparency.

The largest four banks account for 77% of personal current accounts, 85% of business current accounts and 90% of business loans in the UK.

Annual switching among personal customers was low, with only 3% switching each year, with the level at 4% for banks' business customers.

Satisfaction levels with the "big four" banks for personal current accounts were less than 60% yet their market shares remained stable, it added.

Very limited gains had been made by those with the highest levels of customer satisfaction and this was "not what would normally be expected in well-functioning, competitive markets".

The CMA found it was still too hard for newer and smaller banks to enter the market or expand, with much business remaining concentrated in the hands of a few.

The watchdog also said it was difficult for customers to make comparisons between lenders, particularly on complex overdraft charges, limiting banks' incentives to compete, and possibly resulting in higher overdraft charges.

Meanwhile, the extent to which the firms used "cross-subsidy" between different retail banking products and different customer groups using "free-if-in-credit" accounts may also "distort competition".

Mr Chisholm told BBC Radio 4's Today programme that the watchdog was not suggesting collusion between the banks but that they were "not putting each other under enough pressure".

The CMA said that while it was minded to launch a full-scale market investigation, it would consider views on proposals put forward by the big four banks which they have said could be implemented instead.

These included setting up a comparison website, making it easier for SMEs switching banks to open accounts, and taking "promotional measures" to make comparisons and switching easier.

The Treasury and Labour both welcomed the CMA announcement.

Richard Lloyd, executive director of consumer group Which?, said: "For too long customers have been getting a raw deal from the biggest high street banks, so a full inquiry into the current account market is welcome, if long overdue.

"While there have been encouraging signs of change from some banks, we need to see a revolution in customer service and much better, easily comparable products if more people are to be convinced that it's worth switching accounts.

John Longworth, director-general of the British Chambers of Commerce, said: "Businesses want more competition, choice and transparency in the banking sector."

Shares in Royal Bank of Scotland were down more than 2% while rivals Barclays, HSBC and Lloyds Banking Group were also lower.

John Allan, national chairman of the Federation of Small Businesses, said the probe should focus on reducing "barriers to entry" for new banks and alternative finance providers.

He said: "The goal should be to deliver a market structure that encourages far more dynamism, choice and innovation. That should encourage the major high street banks to up their game for the small business customer."

Anthony Browne, chief executive of the British Bankers Association, said: "All the banks will co-operate fully with this review and any subsequent investigation.

"There are substantial changes currently under way across the banking industry to strengthen competition - which improves choice and service for customers.

"We welcome the fact that the CMA has recognised that there have been a number of recent improvements for customers.

"Banks are pro-competition - they compete for customers every day. Last month we published a series of ideas to help new banks set up and smaller players to grow. We hope these suggestions will be taken up by regulators and politicians."

Comments (2)

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5:16pm Fri 18 Jul 14

RealLivin says...

Surely a private profit seeking business is a conflict to interests when it comes to managing money. Bank should be run as NONE profit making, after all how many of the high paid execs have been held accountable for the banking scandals and mismanagement, and I don't mean sacked with a golden hand shake and million pound pensions but forced to loose their homes and saving as others have, due to their "errors in judgement"
Surely a private profit seeking business is a conflict to interests when it comes to managing money. Bank should be run as NONE profit making, after all how many of the high paid execs have been held accountable for the banking scandals and mismanagement, and I don't mean sacked with a golden hand shake and million pound pensions but forced to loose their homes and saving as others have, due to their "errors in judgement" RealLivin
  • Score: 0

6:08pm Sat 19 Jul 14

welshmen says...

This is not my work I pasted it...

One Step Banking To Eliminate Income Tax Completely

A new concept has come to light within Nationalist banking circles that would eliminate the need for personal income tax by taxing, in the same way as VAT does today, all business transactions at source.

The idea offers to circumvent all the tortuous reforms within the banking and financial establishment that we require, as Nationalists, to rebalance the nation's financial circumstances.

A government supervised National Clearing Bank (NCB) would mean all current financial, investment and insurance services could remain intact and unchanged. The only provisor would be that to continue operating, just as with any other business with the UK, all their financial dealings would be obliged to pass through the nation's clearing bank, if they wanted to operate within the UK.

Even the Bank of England could remain as it is with its private shareholders and right to issue IOU notes as currency, providing, of course, they do all their business openly through the NCB.

Having this National Clearing Bank through which every legal financial activity must pass ensures that the government has the ability to observe, understand and control the nation's trading position first hand, without interference from a third party and according to Nationalist business protocol.

The NCB can control the flow of money throughout the whole nation, subtract tax at source, create and issue debt free currency, and define the form of currency acceptable for taxes. This allows for the gradual replacement, perhaps over two or three years, of old interest charged money for new debt free government issue currency.

The NCB could then instigate and operate Maynard Keynes' "bancor" trading system, so favoured by China and other BRICS and non-aligned countries, which obviates a need for a reserve currency, debilitating exchange rates, or the obligation to operate through the Bank for International Settlement.

"Bancor" is an international trading system which is a form of credit between one nation and another. This allows nations to trade securely outside the control of private banks on behalf of major companies. This will reduce trading costs and increase security and goodwill amongst trading partners.

Information provided by the NCB means that weak areas of the economy can be quickly observed by government. Any required injection of the nation's debt free currency to invest in new infrastructure, capital equipment or aid a local community suffering from a business failure, can be actioned quickly.

The idea of a National Clearing Bank comes from observing the effectiveness of the European Coal and Steel Community (ECSC) established in 1952. It changed the face of Europe for ever by taking absolute control of all coal and steel production in West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg.

The ECSC had the right to control prices, channel investment, raise funds through a tax on sales, and allocate coal and steel to which ever company it chose. Its decisions were binding and could not be contested by an individual nation.

Gradually, just as happened with the ECSC, financial and business institutions within Britain as well as those without, who wish to trade with us, would be obliged to operate according to British Nationalist thinking and ideas.

The national government would operate a financial monopoly just as the ECSC did in Europe. In the same way as the ECSC irrevocably changed western nations and their trading habits, so too the NCB would change Britain and her trading partners in to Nationalist compliant operators.

This way, the argument goes, Nationalists can ease out unacceptable forms of business, such as pay day loan sharks like Wonga or inefficient inflationary quantitative easing by the Bank of England. International investments can be fully monitored and absentee landlords and foreign ownership of British companies discouraged.

Ultimately the NCB could operate its own debit and credit cards through the nation's clearing bank. Authorised appointed agents would be licenced to issue card facilities such as high street banks, larger retailers or even national charities. This would allow us to operate the nation's finances outside the control of US and Zionist controlled banks.

Unfortunately, while this new idea seems on the surface to offer all the answers to our nation's banking problems, it does have a lot of drawbacks. The most obvious of which is does it give government too much power?

While the possibility of eliminating income tax altogether does seem possible, would the actual outcome be to stifle business with too much red tape and act as a brake on investment?

Would the international banking community be prepared to do business with a government controlled clearing bank, since most clearing banks throughout the world are privately controlled?

Despite the elimination of personal income tax because there is no national debt to pay on government debt free currency, would the people, the electorate, have confidence in a clearing bank owned by the nation as opposed to privately owned clearing banks?

Change of government after elections would inevitably mean that monetary policy would change every few years. The result might destabilise the nation's currency if in the hands of politicians alone. Would this cause worse financial crises than we already suffer?

While at first sight the idea of a British government owned National Clearing Bank seems to answer all our current problems, and as one observer recently commented it is "very radical and elegantly simple", it is clear it also has as many negatives, if not more, than just tinkering with the present system....
This is not my work I pasted it... One Step Banking To Eliminate Income Tax Completely A new concept has come to light within Nationalist banking circles that would eliminate the need for personal income tax by taxing, in the same way as VAT does today, all business transactions at source. The idea offers to circumvent all the tortuous reforms within the banking and financial establishment that we require, as Nationalists, to rebalance the nation's financial circumstances. A government supervised National Clearing Bank (NCB) would mean all current financial, investment and insurance services could remain intact and unchanged. The only provisor would be that to continue operating, just as with any other business with the UK, all their financial dealings would be obliged to pass through the nation's clearing bank, if they wanted to operate within the UK. Even the Bank of England could remain as it is with its private shareholders and right to issue IOU notes as currency, providing, of course, they do all their business openly through the NCB. Having this National Clearing Bank through which every legal financial activity must pass ensures that the government has the ability to observe, understand and control the nation's trading position first hand, without interference from a third party and according to Nationalist business protocol. The NCB can control the flow of money throughout the whole nation, subtract tax at source, create and issue debt free currency, and define the form of currency acceptable for taxes. This allows for the gradual replacement, perhaps over two or three years, of old interest charged money for new debt free government issue currency. The NCB could then instigate and operate Maynard Keynes' "bancor" trading system, so favoured by China and other BRICS and non-aligned countries, which obviates a need for a reserve currency, debilitating exchange rates, or the obligation to operate through the Bank for International Settlement. "Bancor" is an international trading system which is a form of credit between one nation and another. This allows nations to trade securely outside the control of private banks on behalf of major companies. This will reduce trading costs and increase security and goodwill amongst trading partners. Information provided by the NCB means that weak areas of the economy can be quickly observed by government. Any required injection of the nation's debt free currency to invest in new infrastructure, capital equipment or aid a local community suffering from a business failure, can be actioned quickly. The idea of a National Clearing Bank comes from observing the effectiveness of the European Coal and Steel Community (ECSC) established in 1952. It changed the face of Europe for ever by taking absolute control of all coal and steel production in West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg. The ECSC had the right to control prices, channel investment, raise funds through a tax on sales, and allocate coal and steel to which ever company it chose. Its decisions were binding and could not be contested by an individual nation. Gradually, just as happened with the ECSC, financial and business institutions within Britain as well as those without, who wish to trade with us, would be obliged to operate according to British Nationalist thinking and ideas. The national government would operate a financial monopoly just as the ECSC did in Europe. In the same way as the ECSC irrevocably changed western nations and their trading habits, so too the NCB would change Britain and her trading partners in to Nationalist compliant operators. This way, the argument goes, Nationalists can ease out unacceptable forms of business, such as pay day loan sharks like Wonga or inefficient inflationary quantitative easing by the Bank of England. International investments can be fully monitored and absentee landlords and foreign ownership of British companies discouraged. Ultimately the NCB could operate its own debit and credit cards through the nation's clearing bank. Authorised appointed agents would be licenced to issue card facilities such as high street banks, larger retailers or even national charities. This would allow us to operate the nation's finances outside the control of US and Zionist controlled banks. Unfortunately, while this new idea seems on the surface to offer all the answers to our nation's banking problems, it does have a lot of drawbacks. The most obvious of which is does it give government too much power? While the possibility of eliminating income tax altogether does seem possible, would the actual outcome be to stifle business with too much red tape and act as a brake on investment? Would the international banking community be prepared to do business with a government controlled clearing bank, since most clearing banks throughout the world are privately controlled? Despite the elimination of personal income tax because there is no national debt to pay on government debt free currency, would the people, the electorate, have confidence in a clearing bank owned by the nation as opposed to privately owned clearing banks? Change of government after elections would inevitably mean that monetary policy would change every few years. The result might destabilise the nation's currency if in the hands of politicians alone. Would this cause worse financial crises than we already suffer? While at first sight the idea of a British government owned National Clearing Bank seems to answer all our current problems, and as one observer recently commented it is "very radical and elegantly simple", it is clear it also has as many negatives, if not more, than just tinkering with the present system.... welshmen
  • Score: 0
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