The Office of Fair Trading has announced that it is "bringing forward" its review of SME banking, as recommended by Andrew Tyrie's Banking Commission report. The market study will ask if competition is working in the sector.
The SME banking study will cover England, Northern Ireland, Scotland and Wales. The OFT is launching the first step of this work today and is seeking views on its proposed scope, in particular on:
- Competition in the supply of banking services to SMEs – whether SMEs have access to services that meet their needs and represent good value;
- Competition in the supply of lending or other finance to SMEs – such as whether any lack of competition between banks is holding back SME lending or other finance to SMEs;
- Whether there are types of SME (e.g. start-ups or small financial firms) that face particular difficulties, and if so why.
Clive Maxwell, OFT chief executive, said:
A competitive banking system and access to finance is vital to businesses and to economic growth.
Our review of SME banking is part of an ongoing planned programme of work in this area to allow the Competition and Markets Authority to decide whether or not to make a market investigation reference by 2015. We welcome today’s Parliamentary Commission on Banking Standards report which stresses the importance of competition in this sector.