UK Banking Sector Needs More Competition

In what is seen as a direct attack on the giant banking corporations the governor of the Bank of England has claimed that more competition is needed in the banking sector. In the last few years there have been a lot of mergers which has led to the formation of giant banking corporations shrinking the choices that customers have.

In response to a question posed to him by TUC members yesterday (September 20th), Mervyn King stated that consumers should have more choice of where to bank. He told the audience of trade union members: "We need more competition in the banking sector so that people can indeed choose from a wide range of options.”

The customers are being forces to accept the diktats of most of these giant banking corporations which are being run by bonus hungry management who are using every trick in the book to maximise profit for themselves. Customers of small retail banks which have merged with the giants aren’t too happy with their bankers and have to stick on due to the lack of choices available.

Mervyn King added "I do think that mutual organisations have a very important part to play in this and indeed some of the mutual organisations in banking were the ones who prospered in the crisis." The banking giants also have the potential to drive an entire economy into a crisis as was seen in the recent past. This also advocates the idea of having more financial houses.

Mr King added that mutual organisations were trusted by the majority of consumers so they can play a key role in the future of British banking. A number of UK banks have merged, such as Lloyds and HBOS, in the wake of the financial crisis which has reduced the level of competition between firms. This is slowly moving the UK banking sector to a situation of monopoly.

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