BBA calls on ministers and regulators to nurture challenger banks
The British Bankers Association has urged ministers and regulators to implement an action plan to support competition in the banking industry.
A new BBA report promoting competition in the UK banking industry identifies ways to encourage new players to set up and grow. The study identifies key problems facing new entrants and suggests policies to address each of these issues.
It covers the need to level the capital playing field, recommends the removal of barriers that might restrict the public sector from investing funds in emerging banks, and calls for more proportionality from regulators, with less substantial banks not obliged to meet the standards imposed on their larger peers for every regulation.
James Barty, the BBA’s director of strategy, said: “Customers are the biggest winners from competition. You just have to look at how easyJet, Ocado and Lidl have shaken up their industries by providing new goods, services and price structures.
“The banking industry is made up of a number of different markets, each with its own range of providers striving to win customers every day. Many of these markets are already extremely competitive, but we want ministers and regulators to make it easier for emerging banks to set up and grow.
“The best way to promote competition is by creating a more level playing field for players of all shapes and size. It’s vital that we don’t treat all banking markets as the same and introduce rules, regulations and costs that smother changes that are already driving competition.”