Thursday 17, October 2013

The government has announced plans for a new fully independent regulator that will sit under the Financial Conduct Authority (FCA) umbrella as part of the Banking Reform Bill. It will have a specific objective to promote competition in the banking sector.

The new regulator will help smaller firms challenge the big banks to deliver better benefits for users of financial services. For example, smaller firms have to pay the big banks to access key services and the incumbents have the power to block access or charge unfair fees to smaller competitors.

It will also be tasked with ensuring that the needs of consumers are fully taken into account.

Financial Secretary to the Treasury, Sajid Javid said:

"The government is determined to open up competition in the banking sector so that it serves the needs of the British economy, businesses and customers."

"An open and transparent payments system is crucial to give new players freedom to challenge the big banks without unfair barriers. The reforms we are announcing today will encourage innovation, ensuring that real benefits are passed onto each and every user of financial services."

The government’s response to its consultation, Opening up UK payments, has also been published this week.