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Labour to refer banks to competition authorities pledge
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=21056		 Page 1 of 2
Author:  pcernie [ Wed Jan 15, 2014 5:11 pm ]
Post subject:  Labour to refer banks to competition authorities pledge
http://www.theguardian.com/politics/201 ... 5-miliband

Meanwhile...


Protection for London's banks at heart of UK's EU reform plans, says Osborne

http://www.theguardian.com/politics/201 ... ge-osborne

Quote:
Cast-iron legal protections for the City of London will lie at the heart of David Cameron's EU reform plans, George Osborne has said, as he issued a strong warning that the UK would leave the bloc unless wide-ranging changes were agreed.


In terms of the public Labour are probably onto a winner, but Team Cameron obviously have bigger fish to fry at home and abroad...
Author:  Amnesia10 [ Wed Jan 15, 2014 6:00 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
Quote:
But the party would not indicate whether it had a specific cap on the size of a retail bank in mind. Labour officials would only say that a clearcut market share cap of 25% – as had been leaked on Tuesday night – was wide of the mark.

25% is still very generous. Make it much smaller and allow banks to decide how they want to be divided. Give them a year to decide. Also allow competitor banks to buy any unwanted branches at a sensible value and restrict the change of use of branches so that banks have a vested interest in selling old branches to new banks. That might help new banks set up.
Author:  l3v1ck [ Wed Jan 15, 2014 6:08 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
So if a bank already had a 25% market share and I want to move my current account to them, I can't. Is that what labour are suggesting?
Author:  jonbwfc [ Wed Jan 15, 2014 7:40 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
l3v1ck wrote:
So if a bank already had a 25% market share and I want to move my current account to them, I can't. Is that what labour are suggesting?

Would rather depend how the define 25% doesn't it? Available customers, number of branches, total assets. Any number of ways you could split it, many of which would allow them to take in more customers provided they mitigate it by other measures.

It's a rather simplistic way to implement a block on any bank ending up 'too big to fail'.
Author:  Amnesia10 [ Wed Jan 15, 2014 7:43 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
l3v1ck wrote:
So if a bank already had a 25% market share and I want to move my current account to them, I can't. Is that what labour are suggesting?

No the bank would have to break up. It would not be trigger by a single account transfer. Though it would probably be highlighted in the press that the bank would be breaking up. New account opening would be suspended for a while so each bank would have to detail its accounts, then you could pick which bank you would like to join.

It is also not going to do much for competition. Better to break them up further. Bring back the dozens of banks names that they removed through mergers and takeovers. Even with the proposed change the banks will all be too big to fail.
Author:  l3v1ck [ Wed Jan 15, 2014 8:27 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
Why compete for customers with good deals and service if you're going to be punished for it by being broken up?
Author:  Amnesia10 [ Wed Jan 15, 2014 8:43 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
l3v1ck wrote:
Why compete for customers with good deals and service if you're going to be punished for it by being broken up?

Because you can pick more profitable customers.
Author:  hifidelity2 [ Thu Jan 16, 2014 11:03 am ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
Amnesia10 wrote:
l3v1ck wrote:
Why compete for customers with good deals and service if you're going to be punished for it by being broken up?

Because you can pick more profitable customers.

So they all end up cherry picking the best and ignoring the rest - hardly driving compettion is it

Also as we have seen from the Lloyds debarcle no one want the branches (well no bank) - so they will end up being sold as Wine Bars etc.

If I was opening a new Bank I would do it mainly as an on-line Bank with very limited high street presence ( aka 1st Direct) as its far more profitable
Author:  l3v1ck [ Thu Jan 16, 2014 1:10 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
I only ever go into banks for two reasons.
1) To pay in a cheque, which only happens once in a blue moon.
2) To make an overpayment on my Mortage, because Santander are so [LIFTED] they can't let me do it online (unlike my previous mortgage provider).

Problem 2) will be solved by leaving them later this year when we remortgage.
Author:  Amnesia10 [ Thu Jan 16, 2014 4:02 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
hifidelity2 wrote:
If I was opening a new Bank I would do it mainly as an on-line Bank with very limited high street presence ( aka 1st Direct) as its far more profitable

You would have significant problems. The bank clearing system is owned by the big banks and all the big online banks are already owned by high street banks, such as HSBC owning First Direct. All these are is very similar to the soap duopoly of Unilever and Proctor and Gambol coming out with loads of different brands like Persil etc. This gives the perception of competition, but is really a tightly sewn up market.
Author:  hifidelity2 [ Fri Jan 17, 2014 1:13 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
Amnesia10 wrote:
hifidelity2 wrote:
If I was opening a new Bank I would do it mainly as an on-line Bank with very limited high street presence ( aka 1st Direct) as its far more profitable

You would have significant problems. The bank clearing system is owned by the big banks and all the big online banks are already owned by high street banks, such as HSBC owning First Direct. All these are is very similar to the soap duopoly of Unilever and Proctor and Gambol coming out with loads of different brands like Persil etc. This gives the perception of competition, but is really a tightly sewn up market.

Which is a different argument to what this tread was about

In the end if I as a bank can only have (say) 7 million customers and lets say I have 8 million I will write to the 1 million who generate the least profit and tell them to get lost. No other Bank will want them so you will end up with a whole underclass who cant get a bank account
Author:  jonbwfc [ Fri Jan 17, 2014 4:27 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
hifidelity2 wrote:
No other Bank will want them so you will end up with a whole underclass who cant get a bank account

We already have that.
Author:  Amnesia10 [ Fri Jan 17, 2014 5:02 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
hifidelity2 wrote:
Amnesia10 wrote:
hifidelity2 wrote:
If I was opening a new Bank I would do it mainly as an on-line Bank with very limited high street presence ( aka 1st Direct) as its far more profitable

You would have significant problems. The bank clearing system is owned by the big banks and all the big online banks are already owned by high street banks, such as HSBC owning First Direct. All these are is very similar to the soap duopoly of Unilever and Proctor and Gambol coming out with loads of different brands like Persil etc. This gives the perception of competition, but is really a tightly sewn up market.

Which is a different argument to what this tread was about

In the end if I as a bank can only have (say) 7 million customers and lets say I have 8 million I will write to the 1 million who generate the least profit and tell them to get lost. No other Bank will want them so you will end up with a whole underclass who cant get a bank account

Why not say you have each new bank would have to have 4 million customers. If a bank decided to dump a million customers it should be stripped of its banking license. End of problem, end of bank.
Author:  l3v1ck [ Fri Jan 17, 2014 5:07 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
How can you force a bank to have a minimum or maximum number of customers? People have to choose which bank they want to use.
Such draconian restrictions make me think of the Chinese style of government. 'You'll have the bank account we tell you to have, and you'll like it'.
Author:  Amnesia10 [ Fri Jan 17, 2014 6:32 pm ]
Post subject:  Re: Labour to refer banks to competition authorities pledge
l3v1ck wrote:
How can you force a bank to have a minimum or maximum number of customers? People have to choose which bank they want to use.
Such draconian restrictions make me think of the Chinese style of government. 'You'll have the bank account we tell you to have, and you'll like it'.

It will be done by market share or assets. The numbers will be almost irrelevant. Also If banks are significantly smaller the issue of bonuses will also disappear.
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