Conservatives want competition probe of banks

LONDON (Reuters) - The banking sector should undergo a competition probe before the sale of national stakes in individual banks, the Conservative Party said on Monday.

To avoid meltdown in the financial sector during the credit crunch, Britain acquired large stakes in Lloyds and Royal Bank of Scotland, and completely nationalised Northern Rock.

"As it comes to the point.... when a government needs to think about selling shares that the taxpayer owns in our largest banks, I think we need to have a strategic view of the kind of banking system we want at the end of that process," George Osborne, shadow treasury minister for the Conservatives said.

"We shouldn't just go into it blind, I think it is sensible, given the consolidation that has happened in the retail bank sector over the last 18 months that we ask, through the OFT, the Competition Commission to do a focussed review on that to inform our process of selling the bank shares," Osborne told reporters.

(Reporting by Adrian Croft, editing by Keith Weir)