UK News

Insights from the UK and beyond

from Breakingviews:

UK banks have much to fear from latest probe

By Chris Hughes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The latest competition review of UK banking should aim to be the last. An antitrust probe in 2000 led to limited price controls after concluding that British lenders made excess profit. There were two more big investigations after the financial crisis. Yet concerns about market inefficiencies persist. That suggests the Competition and Markets Authority should do something radical this time.

The CMA says it is minded to conduct a comprehensive investigation of UK banking later this year. The industry is at least as oligopolistic as it was 14 years ago. Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have 77 percent of personal accounts and 85 percent of small-business banking.

So-called challenger banks have emerged from disposals by Lloyds and RBS as mandated by the European Commission. But the market has become more concentrated, especially in mortgages, after Lloyds swallowed Halifax and Bank of Scotland and several former building societies collapsed. Customer dissatisfaction is high. Yet just 4 percent of SME customers and 3 percent of personal customers switch accounts annually. The banks say things are already changing for the better. Twas ever thus.

from MediaFile:

The future of journalism in the UK

By Mark Thompson
The opinions discussed are his own.

In the UK we are going through an unprecedented crisis in journalism, a crisis with the boundaries and techniques of investigative journalism at its heart.

We don’t yet know what will emerge from this crisis and from Lord Leveson’s Inquiry, but any recommendations about new laws or regulation will be studied with interest by Governments around the world.

from Felix Salmon:

Dimon vs Vickers

It's beyond ironic -- closer to moronic, really -- that Jamie Dimon would give an interview to London's very own Financial Times, complaining that international bank-regulation standards are “anti-American,” on the very day that the Vickers Report -- Robert Peston calls it "the most radical reform of British banks in a generation, and possibly ever" -- is released.

It's literally unthinkable that the US Treasury would ever dream of doing to JP Morgan what the UK Treasury, here, seems to want to do to the likes of Barclays and RBS. This is a Volcker Rule on steroids -- all retail banking will be ring-fenced and forced to operate with enormous amounts of capital, much more than Dimon is complaining about. It's essentially a break-up, in all but name, of the big banks with both retail arms and investment-banking operations. And it's designed, quite explicitly, to strengthen the UK's banking system by reducing the amount of risk and bolstering financial stability.

from Felix Salmon:

How the UK wants to deal with its biggest banks

In the Republican presidential debate last night, there was unanimity on most issues, including the new orthodoxy on the right that bank regulation -- like any other regulation, for that matter -- is a Bad Thing, and a sign of the government overreaching. It's important to remember that this is not the way that right-wing parties behave elsewhere in the world. Consider for instance the UK, which seems to be cracking down on banks in a manner which would make even Barney Frank blush:

Britain's biggest banks will be forced to put a firewall around their retail operations, the chancellor will announce on Wednesday at the Mansion House...

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