LONDON (Reuters) - Britain’s banking sector will be a top focus for the country’s new competition watchdog, its chairman said on Monday, following a second call from MPs for wider customer choice.
The Competition and Markets Authority (CMA) is being created by combining the Office of Fair Trading (OFT) and the Competition Commission.
It takes legal form in October and starts wielding its powers next April to focus more on consumers, cut costs and speed up enforcement, with full investigations to take up to 18 months, instead of 24 at present.
One of the CMA’s first big and politically charged decisions will be whether to order changes in retail and small business banking, two areas the OFT is already looking at.
Last week’s report from the parliamentary Banking Commission urged more competition in a sector dominated by just five banks, echoing similar calls by an earlier parliamentary Vickers Commission into making retail banks safer in a crisis.
“I would assume the CMA would be active in the banking sector and would need to take relatively early action that has been flagged by the Vickers Commission earlier,” CMA designate chairman David Currie told a Chatham House conference.
Currie told Reuters that competition officials have already had “lots of meetings” with the new Financial Conduct Authority, which has a remit to boost competition in financial services.
“We will sit down and work together,” Currie said, adding that any changes to the market would be ordered by the CMA.
Speaking more broadly, Currie said tougher economic times should be no excuse for going easy on cartels as companies may over-step the mark in trying to shore up profitability.
“We must remain resolute and seek to promote effective competition against the pressures for protectionism,” he said.
The CMA, in combining powers to open competition probes and order market changes, is already being accused by lawyers of being judge, jury and executioner.
More controversially, it won’t need to prove dishonesty in cartel offences, which Currie has said is the most important reason why the OFT could not bring more cases to trial.
“We look forward to making the enforcement of the law in this area much more practically effective,” Currie said.
“On enforcement our aim is to secure a steady stream of successful enforcement actions and ensure these cases are well chosen, well managed, sufficient in number and variety, and completed with appropriate pace and transparency.”
He signalled the CMA will view its remit broadly as markets emerge in health and education.
The European Union’s executive European Commission remains the main competition authority for large mergers that involve a significant cross-border element.
Editing by Mark Potter