Featured Product

    FCA Report Examines Reduction in Barriers of Entry to Banking Sector

    December 20, 2018

    FCA published a report evaluating the impact that the 2013 review by the Financial Services Authority and BoE has had on reducing the barriers to entry for firms entering the banking sector in the UK. Additionally, FCA published the technical annex that provides supporting details to the analysis conducted during the evaluation. Also published was a report outlining how FCA uses ex post impact evaluation to assess the impact of its past interventions on consumers, firms, and markets.

    The evaluation report examines the benefits that the 2013 review has generated for consumers and identifies lessons that can be applied to the current and future work. The report emphasizes that it takes time for lowering barriers to entry to affect market shares in the banking sector in a significant way because there may be other barriers to firms expanding to a more significant scale. The following are the key findings of the evaluation:

    • There is a more efficient authorizations process: the time taken to assess firms’ applications has reduced by three months.
    • The rate of entry into the UK banking sector is higher than before the 2013 review. While not all entry can be solely attributed to the changes in the authorization process, firm interviews have indicated that the interventions have encouraged entry into the UK banking sector.
    • The increase in entry has in turn led to a greater range of product offerings in the retail market and benefits for consumers. For example, mortgage borrowers of post-review entrants saved about GBP 3 million in interest payments in the first year of their loans when comparing charges on similar mortgages in 2017.
    • However, there has not yet been a substantial change to concentration in the retail banking sector, nor has there been an evidence of significant competitive responses (for example, more attractive borrowing rates) by incumbent banks.

     

    Related Links

    Keywords: Europe, UK, Banking, Barriers to Entry, Authorization Process, BoE, FCA

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629