The UK’s Competition and Markets Authority has chosen personal current account backing as one of its first subjects of major inquiry. Well, not exactly: a preliminary investigation has led to a consultation on a provisional conclusion that such an inquiry might be appropriate.
There is at once too little and too much competition in personal current account banking in Britain. This is a paradox. It results from a history of cartelisation and over-regulation, together with more recent experience in finance of a transactions-driven culture with excessive focus on short-term profit.
Until the 1970s, British banks all offered the same services on more or less the same terms. They opened for the same – rather short – hours, chosen to meet the convenience of bankers rather than their customers, whom they treated with haughty disdain. This tight oligopoly was not all bad: the people who worked in banks were scrupulously honest and British banks never went bust.