Watchdog: New banks have not helped SMEs yet

Tim Wallace
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THE FLOOD of new banks into the market has not yet reduced the big banks’ dominance in the small- and medium-sized enterprise (SME) market, Chris Woolard from the Financial Conduct Authority (FCA) said yesterday.

The regulators could create a nursery for new banks to help them deal with rules on risk and capital, the director of risk and research policy said, in a bid to tip the table more in favour of new lenders.

New rules on bank licences have made it easier than ever to set up a lender, he told the Treasury Select Committee.

The “catch 22”, where banks had to raise capital to get a licence, but could not get capital without the licence, is gone.

But Woolard said the big banks’ market share is not yet declining.

“There is a large share among a very small number of major banks and it is a relatively stable position,” he said.