Page 289 - Bank Case Studies

Competition &

Markets Authority

The Competition &

Markets Authority (CMA)

was formed on 1 April
st
2014 aiming to “promote

competition for the benefit of consumers, both within and

outside the UK. Our aim is to make markets work well for

consumers, businesses and the economy.” (1)

However, new British banks have struggled to enter the

British current account market due to strict regulation and

high costs which restrict their ability to “challenge” the UK’s

dominant big retail banks – HSBC, Barclays, Lloyds Banking

Group, Royal Bank of Scotland and Santander.

Since the Big Bang in 1986, increasing competition in

banking has remained a key concern of policy makers.
Daniel Tischer (2) provides a model of the UK Competitive

Banking Sector which helps encapsulate changes in this

sector over the past thirty years. This can be understood as

three policy cycles (as shown in figure 1) each geared to

increasing competition focused respectively on

demutualisation (industry concentration),

online banking (efficiency and cost savings), and

new entrants (increased competition)